Toyota Works to Keep the Wow in Hybrids

$4 gas puts the automaker in position to expand its market share.

An experimental plug-in version of the Prius hybrid on the move in Detroit.

An experimental plug-in version of the Prius hybrid on the move in Detroit.

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Down the road, hydrogen fuel—which could be cheaper than gasoline or plug-ins and generate better mileage still—might offer the most promise of all. Toyota, GM, Honda, and others are all investing heavily in fuel cells in the hope of spearheading a genuine energy revolution. It will still take years to perfect the technology and build a nationwide network of fueling stations. But "there appear to be emerging pathways for solutions on fuel cells," Reinert says. For the time being, O'Brien credits Honda—which plans to lease a real-world hydrogen-powered car to a few customers beginning this summer—with having the lead. "Honda has a better overall product," he says. "We're more about powertrains right now."

While designing the car(s) of the future, meanwhile, Toyota may still shake up its lineup to strengthen its position in a market that changes by the day. "Toyota is a small-car leader," says author Magee. "Anybody who knows Toyota knows they're going to plow everything they've got into the areas where they're strongest." And if the seers are wrong and gas prices drop back to $1.50 per gallon, then building that plant in Texas will probably look like a brilliant move after all.


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Toyota
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alternative fuels
General Motors
  • Rick Newman

    Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success and the co-author of two other books. Follow him on Twitter or e-mail him at rnewman@usnews.com.