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Not long after Toyota took up the stake in Subaru that was formerly owned by General Motors, the two companies agreed to work together to add hybrid power-trains to the all-wheel-drive specialist's lineup. The problem is that the unique layout of the Subarus precludes just dropping in the hybrid synergy drive. That means that while Toyota's technology can be used it has to be repackaged. In the meantime Subaru was already working on a new flat four-cylinder diesel engine which was unveiled at last spring's Geneva Motor Show. That diesel will begin appearing in Subarus in the European market after the 2008 Geneva show.

Work continues on the hybrids although Subaru won't say what the timeline is. Fuji Heavy Industries (Subaru's parent company) has said that they won't build hybrids until lithium ion batteries are available. Given Subaru's association with Toyota and their battery problems, it may be a while before we get any Subaru hybrids.