Toyota will debut a concept version of the new subcompact hybrid at the North American International Auto Show press preview on January 11. Toyota won’t specifically discuss the vehicle at this point and it is reportedly set to go into production in late 2011 and arrive on dealer floors in 2012.

The subcompact is expected to offer even better fuel economy than the Prius' combined 50 mpg. The Detroit News reports that Toyota plans to produce about 150,000 of the new vehicle each year at first. The new hybrid will also allow Toyota to reduce the per vehicle cost of each hybrid, reducing prices across its hybrid lineup.

Toyota is also ramping up the production of other hybrid vehicles including the new Lexus LF-Ch Hybrid hatchback and is delaying some other Toyota models to ensure that the quality of the vehicles is where it needs to be. Toyota has faced criticism that its vehicle quality is lacking this year.

As of October 2009, Toyota has sold 417,000 Prius' with the car now in its third generation. Edmunds analyst Jessica Caldwell said, "It'll be interesting to see what they name it [the new hybrid]. The Prius name has such cachet in the marketplace."

Toyota is also working on a plug-in hybrid vehicle that will use new Lithium-ion batteries. The subcompact hybrid will reportedly use the same nickel-metal hydride batteries that the current Prius uses. Toyota began the plug-in Prius production test program early this month.

The plug-in Prius is expected to have an all-electric range of about 12 miles at up to 60 mph on the highway. The initial plan is for Toyota to make 150 of the plug-in hybrids available in the U.S. with 350 of them making it to Europe and Asia during the testing phase of the program.

The program for the plug-in hybrids was officially launched on December 15 with the initial 500 vehicles using first generation lithium ion battery packs produced from the Toyota/Panasonic battery partnership. The plug-in hybrid will connect to an electrical outlet in the home. With the meager all electric driving range of the new plug-in hybrid, the total mpg figure for the vehicle will be 134 mpg, though about 50 mpg is expected in the real world.

Some analysts are not convinced that the very focused mindset of Toyota for hybrids and electric vehicles is justified. Even Toyota officials say that the demand for all electric vehicles will grow very slowly.

Analyst Maryann Keller for Maryann Keller and Associates said, "Toyota is completely convinced about the potential for hybrids spreading to all segments. That has yet to be proven. There aren't many places in the world where hybrids have caught on."