Toyota has made it clear that they aren't interested in building anything like the range-extended EV system used in the Chevy Volt. Instead they are continuing to refine the design of their existing hybrid synergy drive system. Toyota Executive Vice President Kazuo Okamoto spoke to reporters in Tokyo for the big Motor Show their and said the next-generation Prius will have a hybrid system that is half the size and cost of the current version. Although no time-line was given for when it be available, Okamoto did confirm it would use an upgraded nickel metal hydride battery rather than lithium ion.
Okamoto also acknowledged that diesels offer superior efficiency to hybrids in highway cruising conditions while the gas-electric systems offer an advantage in urban driving. He did say that future hybrids would close this gap. While Nissan and Honda are both working on new diesel engines that they will promote in the Japanese market, Toyota has no plans to follow suit.