The next generation of the Toyota Camry, the best-selling car in the U.S. market, will only be available with a gas-electric hybrid powertrain. This is the most audacious step that the Japanese manufacturer has taken so far to drive hybrid technology into the core of the U.S. market.

According to Toyota, the front-wheel drive and all-wheel drive variants of the 2025 Camry will use a gasoline engine displacing 2.5 liters, together with an electric drive system that has been fine-tuned to provide increased output levels.

According to David Christ, head of the Toyota brand in North America, compliance with stricter U.S. fuel economy rules was a factor in Toyota’s decision to make the new Camry an all-hybrid vehicle line, dropping four- and six-cylinder combustion models that made up about 85% of sales in the current model year. These models were a factor in Toyota’s decision to make the new Camry an all-hybrid vehicle line. Another consideration that went into making the choice was “the performance we were able to get out of the hybrid,” as he explained.

Toyota has advanced the development of technology for electric vehicles, yet the company is still wagering that demand for hybrids and plug-in hybrids will stay solid. This is because the manufacturer is using a “multi-pathway” strategy to serve customers’ demands in each market.

Toyota claims the new Camry has 232 combined horsepower thanks to its hybrid powertrain and new electronic all-wheel drive system. This is about 15% higher than the previous generation of Camry, which used a mechanical all-wheel drive system.

On Tuesday in Los Angeles, California, officials from Toyota presented the ninth generation of the Camry, a midsize sedan, in advance of the Los Angeles Auto Show, which will begin on Friday.

The new Camry will compete in a segment that the Detroit brands have primarily abandoned, except Chevrolet’s Malibu from General Motors (GM.N.). Let’s leave hundreds of tiny and midsized SUVs out of the equation. The new Toyota Camry’s direct competition will consist of a few surviving sedans like the Honda (7267.T) Accord, the Hyundai (005380. KS) Sonata, and the all-electric Tesla Model 3 (TSLA.O).

According to the data provided by the California New Car Dealers Association during the first nine months of 2023, the Tesla Model 3 outsold the Toyota Camry in California, an essential market for Toyota.

Toyota has not released pricing details or fuel economy figures for the 2025 Camry, which will go on sale in dealership showrooms in the spring of 2019. The most affordable model of the Camry with a combustion engine is now available for around $2,400 more than the most affordable hybrid version.

According to Christ, most hybrid powertrains sell for a premium of between $1,500 and $2,000 over combustion ones. “We think the hybrid powertrain’s value is worth that kind of premium.”

In combined city and highway driving, the conventional four-cylinder Camry has a rating of 32 miles per gallon; however, the hybrid version of the current Camry has a rating of 52 miles per gallon (84 kilometers per gallon). According to data provided by the United States government about fuel efficiency, the hybrid offers a savings of $650 per year in fuel expenditures compared to the combustion type.

In the past, Toyota adapted its Sienna minivan to utilize an engine configuration entirely composed of hybrid components. The Sienna is “our second-fastest turning car and the car we have the most reservations for,” said Christ.