By Chuck Squatriglia

June 12, Wired

Toyota, rightly or wrongly, is widely considered the greenest automaker, and the company hopes to solidify its hold on the title and move beyond oil through a sweeping plan to produce cleaner, more efficient cars -- beginning with a plug-in hybrid it will produce by 2010.

It's no secret Toyota's been working on a plug-in hybrid to compete against the forthcoming Chevrolet Volt, but Wednesday's announcement sets a firm deadline and makes it clear Toyota has no plans of ceding the green mantle to General Motors. It also underscores how quickly the race to build a viable mass-market electric car is heating up.

The company's ambitious "low-carbon" agenda includes cranking out 1 million hybrids a year and eventually offering hybrid versions of every model it sells. In the short-term, Toyota says it will produce more fuel efficient gasoline and diesel engines and push alternative fuels like cellulosic ethanol and biodiesel. It's also pumping big money into lithium-ion batteries. With fuel prices going through the roof and auto sales going through the floor because of it, Toyota president Katsuaki Watanabe says the auto industry has no choice but to move beyond petroleum.

"Without focusing on measures to address global warming and energy issues, there can be no future for our auto business," he told reporters in Tokyo, adding, "Our view is that oil production will peak in the near future. We need to develop power train(s) for alternative energy sources."

Watanabe's reference to peak oil echoes that of GM CEO Rick Wagoner, who in explaining the company's decision to shut down four truck factories said rising fuel prices and mounting demand for efficient cars are "structural, not cyclical." In other words, the two biggest automakers in the world realize petroleum's days are numbered.

That's not to say the wells will run dry anytime soon or the bulk of Toyota's cars won't rely upon internal combustion for many years to come. "People often ask us whether the vehicles of the future will be hybrid vehicles or clean diesel cars or electric vehicles," Watanabe said. "Our answer is that it will not be one technology because energy situations vary from one market to another."

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photo by Wired