Toyota hopes they will sale 1 million hybrid units a year by the early 2010s and is counting on plug-in cars to help it get there. Toyota will soon be testing plug-in hybrids in Japan, Europe and the United States. The cars will use lithium ion batteries that are being developed with Panasonic EV Energy Co.

"We are making steady progress toward commercialization of this vehicle," Toyota President Katsuaki Watanabe said here at a Christmas Day news conference.

Toyota and Panasonic are preparing for mass production of lithium ion batteries at their Omori plant southwest of Tokyo, he said. But the Toyota chief didn’t offer a start-up date. Given its ambitions, Toyota has little choice but to pursue multiple hybrid strategies.

The company is not just targeting annual hybrid vehicle sales of 1 million by the early 2010s. It wants a hybrid vehicle in every model series by 2020.

Toyota may be the world’s hybrid leader, thanks to the popular Prius. But since launching the Prius in 1997, Toyota has sold only 1.25 million hybrids to date.

To get 1 million a year, Toyota needs to ramp up not only hybrid versions of conventional vehicles but also new hybrid-only models, said Tokuichi Uranishi, head of global planning.