Oct. 26, 2007 Toyota plans to downsize the size of its hybrid engine by half, switching to a nickel hydride battery from the higher-energy lithium ion variety, Reuters reports. The automaker says the third iteration of its best-selling Prius model, tentatively slated for launch in late 2008, will also cost about half as much.

"When we went from the first-generation Prius to the second-generation, we did the same thing," Executive Vice President Kazuo Okamoto, in charge of Toyota's research and development, told reporters in Tokyo.

Toyota, the world's largest automaker, has set a goal of selling 1 million hybrid vehicles annually soon after 2010. It hopes to eventually make the system available across its vehicle line-up.