IN China’s hard push for clean, green cars, Toyota is adopting the most conservative emissions-reduction, fuel-saving route with the most aggressive stance.

Having recently set the ambitious target of nearly eliminating gasoline-engine cars from its product portfolio by 2050, the world’s largest carmaker by sales volume last year is doubling down on its electric hybrid offers in China.

It is not a technology looked upon favorably by government green-care subsidies. On the road to electric vehicle, hybrids are viewed as halfway solutions. But Toyota sees it an incremental step with high commercial potential.

Last week, Toyota proudly declared the arrival of the hybrid era in China with the launch of its latest locally made hybrid system on two of its high-volume sibling compact models, the Levin and the Corolla. Drawing on its wide range of offers in China ready for conversion, Toyota aims to increase sales of its namesake-branded hybrids in China by 10-fold in the future.

Sharing a powertrain with a 1.8-liter engine and a 72-kilowatt electric motor, the newly launched hybrids run on fuel as well as electricity generated within the system. There is no need for external charging.

In Toyota’s portfolio for China, the two cars set a new low record for hybrid fuel consumption -- only 4.2 liters per 100 kilometers. More importantly, they bring the price threshold of hybrids down to a jaw-dropping 139,800 yuan (US$22,085), almost the same level as their gasoline cousins of the same engine displacement.

It is the first time new energy cars, if hybrids can be called that, have become so accessible to the mass market in China.

China’s definition of emerging green mobility is largely confined to plug-in hybrids and electric cars, which support longer electric driving ranges than hybrids and move further from dependence on fossil fuel.

But the slow pace of building charging infrastructure for electric and plug-in cars and their heftier sticker prices have damped public enthusiasm. At the same time, subsidies on purchases of green cars are being scaled back to restore market forces. It is a chicken-and-egg dilemma: to attain economies of scale, green cars need competitive pricing, but to lower prices, they need economies of scale.

Toyota aims to seize the middle ground by offering hybrids that promise some element of environmental friendliness without breaking the bank. The company wants to position itself squarely in the ultimate shift to electric vehicles. In other words, Toyota is tempering cutting-edge innovation with pragmatism.

From a global perspective, Toyota has long been riding strong sales momentum toward economies of scale for hybrids. Up to 8 million hybrids have been sold since the Toyota Prius was launched as the first of its kind in 1997, with the first 1 million achieved in 10 years, and the latest 1 million in just 10 months.

Hiroji Onishi, head of Toyota China, said the hybrids are “currently the most mature and feasible fuel-saving and emission-cutting solution.” That’s an opinion held firmly by Takeshi Uchiyamada, vice chairman of the Toyota Group, who is known as the “father of hybrids.”

The positive impact of hybrids can also be felt at the industrial level as the demand for batteries and electric motor technologies create a spillover effect for the upgrading of key electric car components and manufacturing, said Dong Yang, secretary-general of the state-backed China Association of Automobile Manufacturers.

Dong has acknowledged the role of hybrids in the transition to electric cars, even though the vehicles aren’t included in government incentives like subsidies and free license plates.

‘Wild gamble’

The Corolla and Levin hybrids, despite their low fuel consumption, aren’t even eligible for China’s most recent cuts in the vehicle purchase tax for energy-saving cars, with the line drawn at engine displacement smaller than 1.6 liters.

Auto analyst Zhang Zhiyong described Toyota’s single-minded pursuit of hybrids as a “wild gamble” in China.

While rivals like Volkswagen and General Motors have chosen to follow the bait of incentive policies, Toyota is betting against the commercialization of plug-in hybrids and purely electric cars — at least for the foreseeable future.

The gamble is no off-the-wall decision. It has taken Toyota 10 years to develop its hybrid strategy for China, starting with the production of the Prius in China in 2005 to test the waters. That was followed by a US$700 million investment in the Toyota Manufacturing and Engineering Center China, which opened in 2013 in Changshu, Jiangsu Province. It is the company’s largest research and development center in the world.

In the past, Prius hybrids failed to gain much traction in China because of their relatively high prices and the tariff costs of importing the hybrid systems for local assembly.

That obstacle has been removed by the Changshu-led local production of key hybrid components, including batteries, power control units, electric motors, and matching engines.

The price of hybrids is the key to luring consumers out of traditional cars in the same segment, and Toyota wants to get it right with initial pricing rather than discounts, the company said. Toyota’s hybrid localization strategy stops at the premium segment in China. Lexus holds a dominant 80 percent share in that segment’s hybrid volume, which equals to 24 percent of its sales, but its maker has been cautious about localizing production.

There has been talk for years that Toyota would initiate local Lexus production after surpassing the 100,000 unit sales mark. It fell short of that target by 15,000 units last year. So Lexus is now the only of the top 10 sellers, besides sports car maker Porsche, that is sticking to import policy.

One of the advantages for Lexus is that it takes only two days to ship cars from the factory in Kitakyushu to Shanghai — the same time that it takes to get a car to Tokyo, said Tetsuya Ezumi, executive vice president of Lexus China.

He said the current policy also supports Lexus’s make-to-order operation, freeing dealerships from the risk of high inventories. The inventory level of Lexus dealerships in China stood at 0.6 month as of September, far below the 2.4 months seen in the luxury segment on average.

For Lexus, catering to rising demand means simply increasing the frequency of order-taking from monthly to weekly.

Despite their different policies on hybrid localization, Lexus and Toyota brands are both following shrewd policies. They belong to a automotive group known for its lean management and systematic elimination of waste.

So when Toyota decides to embark on a new course, it’s a sign to sit up and take notice for the industry.