Toyota Motor Corp. (NYSE: TM), responding to U.S. demand for its Prius hybrid vehicle, will begin making the small sedan in the U.S. The decision comes on the back of a weak U.S. dollar -- which makes exports more expensive -- and also reflects the fact that the U.S. is the biggest market for the 45 MPG vehicle.

It will take until 2010 for the Prius to be built in U.S. factories owned by Toyota. In a strange twist of irony, the Mississippi plant that will build the Prius was slated to make Highlander SUVs. Except for the hybrid version of that midsize SUV, consumers continue to shun almost anything with a V6 or larger in the face of "not-going-anywhere" $5/gallon gasoline.

With the U.S. making up over 60% of global demand for the Prius, Toyota has a winner here -- but it needs to spread the wealth into other passenger vehicle products as well. If Toyota can get its hybrid technology affordable in such staples as the Camry and Highlander, it will have a winning place in U.S. sales, even more than it commands now. The Prius is a great first step -- but more need to come. Consumers are mad about gas prices and fickle about which future cars they'll drive -- play to them.

MAJOR PAPERS:

• The Wall Street Journal reported that Toyota Motor Corporation (NYSE: TM) is set to revamp its manufacturing operations in the U.S. in response to rising gasoline prices that have led to a shift toward fuel-efficient models. Officials at the auto maker said key moves may include dropping plans to produce the Highlander car-SUV crossover vehicles in a Tupelo, Mississippi plant, instead producing the Prius at the plant.
• Tomorrow Apple Inc (NASDAQ: AAPL) is set to launch its second version of the iPhone but it also will be opening its APP Store to software developers--an online bazaar--with the intent of bringing more applications to the phone as it has with music via its iTunes stores. Apple's goal is to turn the iPhone into a gadget that more resembles a personal computer, the Wall Street Journal reported.

OTHER PAPERS:

• According to sources, the South China Morning Post reported that Wynn Resorts Limited (NASDAQ: WYNN) is considering a secondary listing in Hong Kong that would raise as much as $3B. The source said that the fund-raising plan has yet to be approved that that the company is a "long way" from a share sale and "might never do it."

WEB SITES:

• In an interview, Bloomberg reported that Former St. Louis Federal Reserve President William Poole said there is an increasing chance the U.S. may need to bail out "insolvent" Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, and Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac. Poole said data provided show that the fair value of Fannie Mae's assets fell 66% to $12.2B in Q2, while Freddie Mac owed $5.2B more than its assets were worth during the quarter.

Toyota Motor Co.'s (NYSE: TM) Prius hybrid is by far the world's most successful hybrid vehicles, with sales numbering over one million units. In addition to the great gas mileage these gas/electric vehicles provide, could these cars become even more efficient? According to Toyota, that's already in the works.

The Japanese automaker was featured in Japan's Nikkei newspaper yesterday as saying it will begin installing rooftop solar panels on its next-generation Prius vehicles. Starting with the high-end model, these solar panels will be used to power the air conditioning systems of the car. According to the Nikkei report, these solar panel arrangements may start showing up as next spring.

If Toyota can pull this off, it will mark yet another milestone in automotive history: including solar panel technology in a mass-produced car. It could also set off a trend to power automotive subsystems directly from solar power instead of internally generated power from the gas engine/alternator system or the onboard electric motor. Solar power is abundant and free -- why not use it as much as possible?

Now, where are the other automakers with this? General Motors (NYSE: GM)? Ford Motor (NYSE: F)? A show of hands, please.

When Toyota Motor Corp. (NYSE: TM) announced that is had sold its one-millionth Prius hybrid car, environmentalists worldwide stood up and cheered. After all, it was Japanese foresight that saw the need for 45-MPG cars more than just a few years ago and all it took for the sales to take off was the onslaught of $4/gallon gas. But as this National Labor Committee analysis explains, is Toyota the touchy-feely auto manufacturer that it seems to be? In a word, no.

The push to get products to the market as fast as possible (hopefully, the "right" products) has turned Toyota into a labor-abusing monolith of corporate greed, according to the article. While General Motors Corp. (NYSE: GM) pays its workers very well from a labor standpoint and gives the labor force a large voice, Toyota's workers are overworked, underpaid and abused in other ways. Is there a good, middle ground? The appetite of U.S. consumers to purchase more fuel-efficient cars -- something Detroit is still unprepared for in many ways -- is giving Toyota unprecedented levels of new business. All this business is creating demand, and in turn, Toyota must form a method to get those products out the door. According to the NLC, turning the screws on human labor rights is the key to all this.

Is it really the "race to the bottom?" As in, the bottom of the price barrel where "worst practices" are adopted as a form of competitive pressure to ensure those sales continue to rack up? The distinction between labor practices for Toyota's Japanese workers and GM's American workers is pretty stark in this example. It seems to strongly suggest that all those Prius owners who believe they are helping the world by bellowing out less emissions and wasting less gas are paying for it in another way -- in the form of human rights abuses they never see.

General Motors Corp. (NYSE: GM) is finally facing the reality of $4 gas. The automaker today announced is plans to close four plants and introduce smaller, more fuel-efficient cars. More importantly, the company is considering selling its gas-guzzling Hummer brand.

Bloomberg News quotes GM Chief Executive Rick Wagoner as saying that the plant closings will save $1 billion and cut North American truck capacity by 700,000 vehicles. About 10,000 jobs may be cut as the result of the closures. GM's board also approved the production of a new small Chevrolet car in a plant in Ohio in 2010 and the Chevy Volt electric vehicle in Detroit, according to the Associated Press.

Wagoner's turnaround plan for GM, which was started in 2005, has hit a brick wall. Sales of pick-ups and SUVs are plunging as gas prices are rising. GM has already shifted much of its health care costs to the UAW but more needs to be done to help the automaker remain competitive.

The highways I drove this Memorial Day weekend were relatively empty thanks to people opting for a Staycation. But people I spoke with were wondering why gasoline prices were so high and whether they'll go higher. While USA Today thinks they've peaked, my answer to both questions is I don't know.

But if one source is right that 60% of the trading volume in oil is from speculators, then a rise in the dollar and a drop in consumption would force those speculators to reverse course -- and that would send oil prices plummeting. Here are five things you can do to help make this happen:

• Drive less. Many people don't have the option to do this. But carpooling is an option for many. People can also try to make many stops during a single car trip rather than doing one at a time. And they can try to telecommute more frequently.
• Take public transportation. Much has been written recently about people taking buses, trains, and other forms of public transportation to work. While this is often more time consuming and can be inconvenient. It may also save money and will certainly cut down on your gasoline consumption.
• Ride a bike or use a motorcycle. I know riding a bike would be a major inconvenience for many people. Riding a motorcycle gets better gas mileage than a car and is fun for some. During periods of dry weather these options could work fairly well. But they'd be awfully tough during a snow or rain storm.

Although Toyota Motor (NYSE: TM) basically invented the popular notion of hybrid vehicles years ago by making the Prius compact passenger car the spokescar of the hybrid world, the automaker now has its sights set a little higher. Toyota wants to sell at least one million Hybrid cars every year shortly after 2010 gets here.

Although Toyota was not the first automaker with some form of hybrid vehicle on the road, it's been the most aggressive marketer of such technology and resulting vehicles by far. Although the hybrid Prius has sold only 1.25 million units since first being introduced in 1997, Japan's largest automaker thinks that mark can be hit annually within a few years. Are those plans too ambitious?

If fuel prices stay at the level they are at now, it's not inconceivable to think Toyota can't hit that mark. The automaker has publicly said that it wants a hybrid drivetrain in every vehicle it sells come 2020, so to get that kind of expertise ramping, it needs to move quite a few hybrid vehicles this year and increase that amount every year going forward.

The internal combustion engine still is not perfected, so transitioning millions of vehicles to a hybrid drivetrain in a little over a decade sounds like a risky plan to many. If Toyota can start selling a million of them per year long before that, though, it just may have a chance.

General Motors (NYSE: GM) is setting itself up for what could be the largest unveiling of an electric vehicle ever with its Volt line of electrically-powered vehicles. As gasoline reaches and surpasses the $3/gallon mark nationwide, customers have to wonder why no car manufacturer has fulfilled the need for an electric car; and one that does not have limitations rendering it non-competitive to a standard gas-powered passenger car, like these Zapcars pictured here.

GM executives have recently said that the Volt is on track for sale for late 2010, and it will be a rechargeable vehicle that is 100% electric, not a hybrid. It's not only nice looking, it would eliminate gas as a variable in that daily commute. To some, that means a savings of a few hundred dollars (or more) per month. GM, however, is not going at this effort alone. Toyota is in the race as well, and there will soon be a "showdown" with GM, according to a senior GM executive last week.

The Chevy Volt should be launched in November 2010, according to GM CEO Richard Wagoner and head of global product development Robert Lutz. That's three years from now, and it's still considered an "aggressive" posture by GM's global design and manufacturing teams. Will Toyota be able to beat that deadline and deliver a solid, 100% electric offering within the next three years and once again show up its main global rival? Lutz said that by next April, one company will be able to show a prototype on the street, and the other will take a credibility hit (stating that batteries won't be able to push cars, even in three years). We'll see who is correct in about five months or so.

Japanese automaker Toyota (NYSE: TM) stole the hybrid vehicle marketing limelight years ago with its Prius passenger car -- you know, the one that has a gas mileage figure of over 50 miles per gallon. Due to combining a smaller gasoline engine with an electric motor, the smaller car has a remarkable fuel efficiency rating, and the word of mouth that started selling the Prius to ecologically-aware consumers and assorted environmentally-conscious folks was like a wildfire in the passenger car market. The waiting line to buy one was half a year in many cases.

Although many detractors say the Prius' claimed gas mileage is not what it's cracked up to be, the popularity contest has already been won. The next step for Toyota would be to make the nameplate in an all-electric fashion instead of a hybrid design that still uses gasoline. The trouble is, no company can produce an all-electric car that has the same amenities as the modern internal combustion vehicle: range, comfort, size, price and design. If anyone can ever make this a reality, though, it would be Toyota (although an effort is still plenty of years off).

Until then, perhaps the automaker is looking at plug-in electric hybrid vehicles for Act II of its hybrid car marketing strategy? At the recent Tokyo Auto Show, Toyota showed off designs that use a hybrid propulsion system that contains a larger battery, allowing the vehicle to travel short distances at highway speeds powered by the electric motor alone, instead of the motor just being used in city stop-and-go traffic. The battery pack would need recharging at night, instead of being charged by regenerative braking like in current designs, but all things considered, this would be the next step to an all-electric design that uses little to no internal combustion (or gas). Whoever gets there first will hold the holy grail of sales to customers needing smaller passenger cars. General Motors (NYSE: GM) isn't sitting still at all, though.

It's hard to decipher the electric car market right now. Hybrids are all the rage, with the upcoming Chevy SUVs from General Motors Corp. (NYSE: GM) about to enter the mix as well as having vehicles like the Ford Motor Co. (NYSE: F) Escape hybrid, the Toyota Motor Corp. (NYSE: TM) Camry hybrid and the nameplate for hybrid cars in the last decade, the Toyota Prius. Is this window dressing for automakers to quell energy-conservation aficionados rather than try to change to an all-electric format for future vehicles?

Anyone who believes that vehicles not relying on oil refining in some way as being the norm in the near future needs to re-examine the facts. I agree with Michael Kanellos of CNET's News.com point of view that while all the efforts so far have been grand, there are literally too many reliances (politically, globally, you name it) on oil at this time. These reliances will hinder any kind of switch to non-hybrid, all-electric vehicles. Sure, progress has been made recently, but it's half-hearted (and will be for the near future).

Batteries, electric motor technology and distance shortcomings all plague the all-electric auto industry as it tries to figure out how to provide the same driving distance (on a battery charge) as gas engines now get while trying to get the cost down to barely over current internal-combustion vehicles cost. Do you think most consumers are going to pay that 35% and up premium for an electric version of that new sedan? Guess again; the environment be damned.

We made it this way, so there's nobody but the market, consumers and automakers to blame here (including you and me). Will we ever see cost-efficient and all-electric vehicles? The road to get there will be very slow and painful, but eventually it will happen. If you can time when and find the companies that will be involved with this transition, you'll make out like a bandit.