Toyota Motor will introduce a smaller, more cost-efficient third-generation hybrid system in its vehicles from 2008, the Asahi daily reported on Wednesday.
The new hybrid drive will be more powerful than the current version, featuring lighter batteries but delivering higher performance, according to the report.
The automaker will also begin to make key components for gasoline-electric hybrid systems in the United States, the first time this manufacturing has been done outside Japan, according to the newspaper report.
Toyota will double the annual output of hybrid systems, reducing the manufacturing cost difference between such systems and conventional gasoline engines.
By making the system smaller than the current second-generation system, Toyota will also expand the use of the system to most of its mid-size or larger cars, according to the paper.
The company has set a goal of selling at least 1,000,000 hybrids annually by early in the next decade.