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Toyota Motor Corporation developed a new hybrid system, Multi Stage Hybrid System, for the Lexus flagship coupe LC500h with the aim of achieving an excellent balance between fuel economy and acceleration performance. The Multi Stage Hybrid Transmission used in this new hybrid system includes a shift device located immediately after the power split device and motor. Compared with previous hybrid systems, the new hybrid system improves fuel economy by reducing electrical loss in the optimal gears, which are selected depending on the driving state. The system also improves acceleration performance by increasing the driving force at low and medium vehicle speeds in lower gears. In addition, the range of the power split device that cooperates with the shift device was widened to enable both an electrically-controlled continuously variable transmission mode and a ten-speed transmission mode, which creates a direct shift feeling to improve driving pleasure.

Reflecting on the world's trend on saving crude oil consumption and to create an economical fuel efficient vehicle for the increasing world population, a new THS-II HV powertrain has been developed for the compact vehicle class. The application of a THS type powertrain for the compact vehicle class was a first for the world and to achieve it, brand new hardware, and software needed to be developed. For the Internal Combustion Engine (ICE), state of the art technologies such as the use of the Atkinson cycle with Variable Valve Timing (VVT), cooled exhaust gas recirculation (EGR), an electric water pump, a compact exhaust manifold, a Low Friction chain, beltless system and exhaust heat recovery system were applied. For the electric motor, copper wire with a rectangular cross section and divided stator cores combined with a newly developed production process were applied for higher volumetric density.