Toyota says the new hybrid system will enable it to improve the economy and driver enjoyment of its next-generation vehicles.

Based on technology from the new Prius, the new system is lighter, more compact and more energy-efficient, and efficient designed to enable the engine to be switched off more often while cruising at higher speeds and benefitting motorway fuel economy – vital for rivalling diesel vehicles.

It expects to have ten versions of six different hybrid drivetrains on sale by the end of 2021, targeting at least a 15% reduction in CO2 emissions. This will include one using a 2.5-litre petrol engine, suitable for large vehicles, which is optimised to waste as little energy as possible as heat.

A new plug-in hybrid setup is also under development, offering a 37-mile electric range and with the ability to use both of its electric motors – one of which is usually only used as a generator – to provide drive power for better responsiveness.

Toyota said it will have this technology available from next year.