Major carmakers are rushing to develop a new generation of plug-in hybrid vehicles including industry giants Toyota and GM, which hope to have the technology ready for sale by the end of the decade. GM appears to have the lead at the moment, forming a partnership with LG Chem to develop and manufacture long life lithium-ion batteries for its upcoming Chevrolet Volt.

Toyota, meanwhile, has been relatively secretive about its plug-in hybrid advancement but has now revealed some details about its progress. Initial trials of plug-in hybrid Prius that were started last year have shown that the vehicles can average 65mpg (3.6L/100km) in fuel-economy over a mixed cycle of both city and highway driving. By contrast, the new 2010 Prius achieves 50mpg (4.7L/100km) in fuel-economy over the same cycle.

"That is real-world driving," Toyota’s national alternative-fuel vehicle manager in the U.S., Bill Reinert, revealed to Automotive News. "I ask my guys to drive them as you drive your normal Prius."

As for which model will be used for Toyota’s upcoming plug-in hybrid, company spokesman John Hanson explained that "it would make sense” to do it with a Prius but said any hybrid model is a possible candidate.

Toyota’s first mass produced plug-in hybrid is expected to on sale in 2010 but the company plans to start U.S. trials of 150 Prius plug-ins later this year. The vehicles will test several different lithium-ion battery designs that will be teamed with a 1.8L four-cylinder engine.