DETROIT (Bloomberg) -- Toyota Motor Corp. the world's biggest maker of gasoline-electric hybrid vehicles, plans to lease cars whose batteries can recharge from normal electrical sockets by 2010, matching General Motors Corp.'s target for introducing the fuel-efficient vehicles.

The company will provide a significant number of plug-in hybrids to global fleet customers, with a large percentage coming to the U.S., President Katsuaki Watanabe said at the Detroit auto show, without elaborating. The cars will help Toyota meet new U.S. fuel-economy rules early, he said.
“We will put the full force of our resources” into efforts to develop vehicles that increase fuel economy and reduce carbon emissions, Watanabe said.
Toyota, initially hesitant to embrace plug-ins, is now racing GM and other automakers to develop the technology. The Toyota City, Japan-based company leads in sales of current hybrids, which can't recharge at outlets. GM has said it may start selling its Volt plug-in hybrid car with lithium-ion batteries as early as 2010.
GM is “right in that race,” Chief Executive Officer Rick Wagoner, 54, told Bloomberg Television in a Jan. 8 interview in Las Vegas, where the Detroit-based automaker showed a futuristic Cadillac sport-utility vehicle powered by hydrogen and lithium-ion batteries. GM and Toyota also are competing for the title of world's largest automaker, a ranking the U.S. automaker has held for 76 years and may have lost to the Japanese company in 2007.
-------------------------Not ready
The planned new plug-in hybrids would use lithium-ion batteries. Last year, Toyota officials had said that lithium batteries for plug-ins weren't ready for consumer use and couldn't gauge market demand.
“The advanced lithium-ion batteries that the Volt would use, batteries suitable for the long-term rigors of everyday automotive use, don't exist,” Irv Miller, Toyota's U.S. vice president for corporate communications, wrote on a company website in September.
Watanabe, 65, also said that to help boost the total fuel economy of Toyota vehicles in the U.S., the automaker plans low exhaust diesel engines for large Tundra pickups and Sequoia sport-utility vehicles in the “near future.”
U.S. President George W. Bush in December signed into law a program mandating a 40 percent increase in car and light-truck fuel economy by 2020, when new models will need to average 35 miles per gallon of fuel.
---------------------------No waiting
“As always, we will not wait until the deadline to comply,” Watanabe told reporters at a reception. “I have issued a challenge to our engineers to meet the 35 mpg standard well in advance of 2020.”
The U.S. Environmental Protection Agency ranks Toyota, of Toyota City, Japan, and Tokyo-based Honda Motor Co. as having the most fuel-efficient fleets of cars and light trucks among major automakers.
Toyota also is trying to perfect its own methods of making ethanol fuel from wood waste, rather than crops, Watanabe said without elaborating. GM earlier said it would buy a stake in a biofuel company that plans to convert waste into ethanol for less than $1 a gallon.
------------------Lithium-ion challenge
Lithium-ion batteries have become standard in mobile phones and laptop computers. Packs needed for Toyota's plug-in hybrids will come from an assembly line the automaker will open at its Panasonic EV joint venture in Japan, run with Matsushita Electric Industrial Co.
Panasonic EV is the world's largest supplier of nickel- metal battery packs for Toyota's Prius, the best-selling gasoline-electric vehicle, and other hybrids.
Automakers have said lithium-ion batteries that hold as much as twice the power of nickel-metal versions, are needed for autos that run almost entirely on electricity, consume little or no gasoline and can be recharged at household outlets.
Lithium-ion batteries aren't currently available in large quantities, cost more and are harder to produce than nickel-metal batteries, and can burn if they overheat.
“The challenge for commercializing lithium batteries for plug-in hybrids is manufacturing,” said Menahem Anderman, president of industry consultant Advanced Automotive Batteries, in Oregon House, California.
----------------------------Toyota's experience
“You combine Toyota's experience with nickel metal, the lithium expertise for Panasonic and lithium research from Toyota, definitely they are the strongest player,” said Anderman, whose research is bought by all major carmakers and who consults with the U.S. and Japanese governments on battery developments.
Johnson Controls Inc. said at the Detroit show that it may have lithium-ion batteries for plug-in hybrids available by 2010 and that that it's trying to produce the power sources for vehicles such as GM's Volt. Johnson Controls, based in Milwaukee, is the world's largest maker of auto batteries.