The plug-in hybrid will go head-to-head with US rival General Motors' Chevy Volt, which is also expected to hit the road in 2010.
The test fleet of plug-in hybrids is part of a broader environmental sustainability plan, Watanabe announced at the Detroit auto show.
He added that Toyota intends to beat a US 2020 deadline requiring automakers to average 35 miles per gallon in the cars they sell in the country. Toyota is also working on developing more efficient methods of producing ethanol from wood waste rather than food crops.
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