Toyota and Lexus are developing turbocharged engines but it appears they might not be as important as originally thought.

Toyota and Lexus are developing turbocharged engines but it appears they might not be as important as originally thought.

Speaking to Automotive News, Toyota powertrain guru Koei Saga said turbocharged engines might not spread across the company's lineup. Instead, he believes larger displacement Atkinson-cycle engines are the answer because they combine high-performance with impressive fuel efficiency.

Regardless, Saga confirmed the company is considering a water or steam injection turbo engine to improve efficiency. However, a lot of work needs to be done before it could ever reach mass production.

In the short term, we can expect more continuously variable transmissions especially in smaller models. Saga also said the next-generation Prius Plug-in "must" have a lithium-ion battery.

Despite being a proponent of fuel saving technologies, Saga says no large scale automaker would develop electric vehicles if it weren't for government regulations. He also expressed doubts about Tesla's business model as it depends on "targeting rich users for whom this is their third or fourth car." This is a tad interesting as Toyota has invested and partnered with Tesla to develop new electric vehicle technology.

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