Toyota's effort in the way of plug-in hybrid technology comes in response to pressure both from the U.S. government and environmental groups who have called on automakers to look beyond hybrids for other solutions to our nation's energy problems. Automakers have been reticent, however, because plug-in hybrids require larger, more expensive battery packs that can withstand being charged to full capacity and drained completely on a daily basis. Toyota will have to work quick, however, as Ford may be the first automaker with a plug-in hybrid on the market.
Ethanol and E85 are not really on the radar of John Q. Public in the U.S., but domestic automakers are heavily marketing their efforts to produce more FFVs and increase the number of E85 pumps on the ground. Toyota expressing interest in developing engines capable of running on both gasoline and E85 implies it doesn't want to be the odd automaker out if E85 catches on.
[Source: Automotive News]