Toyota's Prius is Top Seller in Japan

Updated from 2:24 a.m. EDT

TOKYO -- Toyota's(TM Quote) Prius was ranked the No. 1 selling vehicle in Japan for May, clinching the top spot in the domestic market for the first time.

The revamped Prius debuted last month. Toyota sold 10,915 of the hybrid cars in May in Japan, more than a fivefold increase from the previous month, according to data released Thursday by the Japan Automobile Dealers Association.

Honda's(HMC Quote) new hybrid, the Insight, slipped to third place with 8,183 units sold after nabbing the top spot in April.

That means for the second straight month, a hybrid car-- powered by gasoline and electricity --topped the sales rankings in Japan amid the growing popularity of green cars.

A government tax break for environment-friendly cars in Japan also has helped.

Meanwhile, Bloomberg reports Toyota may have to spend more than $1 billion to meet California's requirement for zero-emission cars. The report cited a person familiar with the matter.

Toyota and Honda have the biggest market share in the state and starting with 2012 models must sell the most vehicles that don't pollute, according to California law. The rule requires 3% of unit sales over a three-year period to be non-polluting models, according to Bloomberg.