Inside Toyota's Hybrid Truck

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"Other makers are ditching the category, but we see an opportunity," says Andrew MacLachlan, a senior strategic planner with Toyota. "If oil doesn't go below $90 a barrel in the foreseeable future, this could be where trucks are heading."

Unlike other flat-bed pickups, the A-BAT would likely be built on a car platform, improving fuel economy, safety, and handling. Its small size, versatility, and hybrid power plant would set it apart from anything on the market or upcoming products from major manufacturers. "This is classic Toyota," says Merkle. "They're positioning themselves ahead of the curve, preparing products for a generation of consumers that is still coming up."

Certainly, growing environmental concerns, new government regulations, and the high cost of fuel have created interest in smaller cars, with new introductions in that category by nearly every major automaker in the past 18 months. Most have been microsedans. The next frontier, analysts and designers say, is smaller vehicles shaped like wagons, vans, SUVs, and—perhaps—pickup trucks. "This is our vision," says Calty senior designer Daryl Harris.

To Be Determined

The new vehicle is also another important symbol of how seriously Toyota takes the U.S. auto market. Calty designers say the idea for the truck came out of "blue sky" brainstorming sessions held at an off-site workshop in March, 2006. "This was the first design project that didn't start with a directive from Japan," says Ian Cartabiano, a project chief designer. "It was literally 'let's think more broadly about what this country needs'." Of course, despite the U.S. focus, if the vehicle did well, it could be transferred to other markets.

Whether or not the A-BAT makes it to market remains to be seen. However, the Calty team behind the new concept has a strong track record, reflected in a parking lot packed with vehicles that were created there. The studio was responsible for the Toyota FTX concept truck, which eventually became the new Tundra. Its FJ Cruiser, a boyish 4x4 with Tonka-truck looks, was so popular with the public when it was unveiled as a concept in 2003 that Toyota scrambled to send it to production. "We've had a lot of success with previous concepts," says Alan Schneider, a project chief designer. "We hope [the A-BAT] has the same impact as the FJ."

Despite Toyota's reputation as a green technology leader, the A-BAT would not be the first hybrid pickup on the market. At the Los Angeles Auto Show in November, GM introduced an advanced hybrid version of its Silverado full-size pickup. But GM's track record in the hybrid market is spotty. A so-called mild-hybrid version of the 2005 Silverado sold dismally, and analysts don't expect the company to sell more than 30,000 units annually.

If any manufacturer has the green gravitas to make a small, economical hybrid a hit—even a pickup—it is surely Toyota. Calty's track record would suggest nothing less.

Matt Vella is a writer for BusinessWeek.com in New York.