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Toyota has been introducing several hybrid vehicles (HV) as a countermeasure to concerns related to the automotive mobility like CO2 reduction, energy security, and emission reduction in urban areas. A next step towards an even more effective solution for these concerns is a plug-in hybrid vehicle (PHV). This vehicle combines the advantages of electric vehicles (EV), which can use clean electric energy, and HV with it's high environmental potential and user-friendliness comparable to conventional vehicles such as a long cruising range. This paper describes a newly developed plug-in hybrid system and its vehicle performance. This system uses a Li-ion battery with high energy density and has an EV-range within usual trip length without sacrificing cabin space. The vehicle achieves a CO2 emission of 59g/km and meets the most stringent emission regulations in the world. The new PHV is a forerunner of the large-scale mass production PHV which will be introduced in two years.