Toyota (NYSE: TM) is upping its bet on ion lithium-battery cars. It has set up a joint-venture with Matsushita Electric Industrial to start mass production of the power sources by 2010.

According to Reuters, "Toyota, the world's top maker of gasoline-electric hybrids, is keen to bring such vehicles into the mainstream by lowering their cost premium." Consumers can plug-in their cars before turning in for the night.

The news is another example of why Toyota stays more competitive than most other large car companies. Who would have seen the mass demand for alternative energy cars as oil doubled? Even Toyota could not have predicted that, but the firm was willing to make a significant investment that customers would continue to move away from gas even if prices did not spike up.

In Detroit, the last one to leave the building can pull the plug on the lights. At the US car companies, that is all electricity is good for.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

General Motors (NYSE: GM), believe it or not, is working toward alternative propulsion systems as energy prices continue to be seen at new highs (while still showing wild volatility), and the electric Volt is just one of its efforts. What will power the electric vehicles of the future? That's a billion-dollar question, since batteries are probably the largest barrier to really commercializing the fully electric vehicle -- from any manufacturer.

GM, according to sources this week, wants its fuel cell technology -- a leading contender for high-energy batteries -- to be commercialized as soon as possible. If fuel cells could be refined even further than where they are today, the economic and practical viability of totally electric cars could be seen soon. So far, talk like that has been full of hot air. But then again, automakers see pent-up demand for this technology as gas prices go absolutely nuts. Oil stands right at $100 a barrel right now. You make the call.

If GM does not get there first, you can bet the competition will -- and will feed the insatiable consumer demand that lies waiting in the proverbial wings. The good news here is that innovation and speed will happen as the race to be first in this "fuel cell" space becomes more heated. As history has shown, in the end, the winner will be the consumer, much to the chagrin of oil producers.

In his most recent State of the Union address, President Bush argued that America "needs to diversify our nation's energy supply." One possible alternative fuel source is ethanol, primarily made from corn in the U.S. In 2005 Congress passed an energy bill that mandates 4 billion gallons of ethanol were to be blended into the nation's fuel supply in 2006, increasing to 7.5 billion gallons by 2012. President Bush wants to increase that amount to 35 billion gallons by 2017. On the face of it, this law sounds like a good deal for ethanol producers as it creates a sustained, guaranteed demand for the product that would justify infrastructure expenditures necessary in both production and distribution.

Unfortunately, ethanol as an investment presents a number of problems. U.S. ethanol is manufactured from corn which is primarily grown in the Midwest. But the processing plants and end-users are primarily on both U.S. coasts. Due to its unique chemical properties, ethanol cannot be shipped via pipeline as can oil, natural gas and gasoline. To get ethanol from its point of origin to its point of use requires shipping by railroads, which are already running at close to capacity. Ethanol shipments in 2007 are forecast to top 140,000 tank cars, each tanker carrying 30,000 gallons. Shipping by rail also requires ethanol growers to build rail facilities -- a prohibitively expensive undertaking. Barge shipment is too slow and many ethanol processing plants are not located on bodies of water. Shipment by truck is not cost-effective.

Even if the distribution problems could be mitigated, where is all this ethanol to come from? Current demand for ethanol already outstrips US production. 21.5 billion bushels of U.S. corn will be used to make ethanol in 2007, producing approximately 4.9 billion gallons. This is not nearly enough to satisfy demand. Consumption of ethanol already stands at 5.5 billion gallons. The U.S. is on-track on import more than 418 million gallons of sugar-derived ethanol from Brazil in 2007, despite the fact that imported ethanol carries a 54 cent-a-gallon tariff. Arguing that the U.S. switch to ethanol does not solve the problem of dependency on foreign energy sources. It merely changes the dependency from Saudi Arabia to Brazil, with China being the third largest ethanol exporter to the U.S.