In such a volatile automotive landscape, Toyota’s refusal to put all its eggs in one electrified basket has proved to be an effective move. The world’s best-selling automaker continues to profit despite changing market conditions, contrary to other Japanese OEMs that are currently dealing with financial troubles.

This time, Toyota is reportedly betting on another form of electrification to compete in the world’s biggest EV market. According to Nikkei Asia, Toyota is now planning to start producing extended range electric vehicles, or EREVs in China.

Compared to usual plug-in hybrids and its traditional HEVs, EREVs use an electric motor to drive the wheels while the combustion engine only acts as a generator. This allows the car to operate like an EV for everyday driving while providing a gasoline-powered backup when the battery needs more juice.

EREVs are being promoted in China as an alternative to pure EVs, as they are less reliant on the charging network because it has an onboard generator. And since EREVs can be more advanced than BEVs, Toyota can also avoid China’s much documented EV price war. 

Toyota plans to produce 200,000 EREV units in China next year, with production expected to rise at 400,000 units by 2028. For now, the Japanese automaker is yet to name its first EREV model for China. Likewise, Toyota is yet to announce plans if they plan to offer the China-made EREV to the rest of the global market.