updated 7/18/2006 5:17:12 PM ET 2006-07-18T21:17:12

Toyota Motor North America Inc. president Jim Press said Tuesday the Japanese automaker plans to pursue a plug-in hybrid vehicle, touting the long-term potential of gas-electric hybrids on America’s highways.

“Make no mistake about it, hybrids are the technology of the future and they will play a starring role in the automotive industry in the 21st century,” Press said in a speech at the National Press Club.

Press, highlighting the company’s work on alternative vehicles, said Toyota is also “strongly considering” a program to develop flexible fuel vehicles in the United States capable of running on E85, an alternative fuel made of 85 percent ethanol.

Plug-in hybrids use larger battery packs that can be recharged through a typical 120-volt outlet, allowing a driver to travel locally on battery power before the vehicle switches to the gasoline engine. DaimlerChrysler has been developing a plug-in hybrid van.

Press, who recently became the first non-Japanese president of Toyota Motor Corp.’s U.S. subsidiary, said hybrid technology has long-term staying power because it can adapt to several alternatives, such as clean diesels, biodiesels, ethanol, plug-in hybrids or hydrogen fuel cells. The automaker produces the popular Toyota Prius hybrid.

The plug-in being pursued by Toyota would be able to “travel greater distances without using its gas engine, it will conserve more oil and slice smog and greenhouse gases to nearly imperceptible levels.”

President Bush has touted the potential of the technology but obstacles exist, ranging from making the batteries lighter, less expensive and more durable. Some observers have expressed concern about the ability of the electrical grid to support the vehicles, but supporters say most plug-ins would be recharged at night.

Amid discussions among General Motors Corp., Nissan Motor Corp., and Renault SA forming an alliance, Press said Toyota has had a “good working alliance” with GM and shares operations at a Fremont, Calif., plant and conducts research on advanced technology.

“I can’t speculate on what will happen if GM and Nissan come together, but I think it illustrates just how tough and expensive it is to compete on a global basis as well as the consistent need for efficiency in our operations,” he said.

Toyota is expected to soon surpass GM as the world’s largest automaker by sales volume. Press said the health of GM and Ford Motor Co. was crucial to the auto industry.

“I firmly believe that GM and Ford will both come back stronger than ever and be very successful. And that’s important because they are vital to our industry and our national economy,” Press said.

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