Due to potential safety problems, Toyota (NYSE: TM) has decided to delay the launch of new high-mileage hybrids with lithium-ion battery technology by one to two years, according to The Wall Street Journal, which cited people familiar with the strategy. The decision destroys any chance of Toyota meeting its goal of selling 600,000 hybrids a year by early next decade, up from almost 200,000 in 2006. The move allows General Motors (NYSE: GM) and others the opportunity to narrow the gap of future vehicle technology.

Toyota has also postponed its plans for the hybrid versions of the Sequoia SUV and the Tundra pickup until 2013-2014. That puts Toyota way behind General Motors and Chrysler's plans to launch hybrid SUVs in 2008.

The "potential safety problem" Toyota says, is the development of lithium cobalt oxide particles in its batteries, which have a tendency to overheat, catch fire or even explode. According to the company, similar problems have been seen in Sony Corp. (NYSE: SNE) lithium-ion batteries in laptops -- mostly because the chemistry of Sony's batteries was similar to that of batteries they were attempting to use in future hybrids.

The next-generation Prius will instead use the conventional nickel-metal-hydride batteries for its launch in early 2009. The first Toyota hybrid with lithium-ion battery technology will not arrive in the U.S. until 2011.

GM will have an opportunity to launch its first lithium-ion hybrid, the Saturn VUE Green Line model, as soon as late 2009, and before any competitors. Toyota's delays also give Honda Motors (NYSE: HMC) the opportunity to highlight its launch of a subcompact hybrid with improved nickel-metal-hydride batteries in 2009. Volkswagen (OTC: VLKAY), BMW and DaimlerChrysler (NYSE: DAI) all plan to create clean diesel engines for U.S. cars starting in 2009. The automakers say they now have obtained the technology to meet tough American clean-air standards.

Regardless of which company produces the first lithium-ion hybrid, Toyota's delays push back J.D. Power's estimates on future hybrid sales. Hybrid sales totaled 2.3% of all auto sales this year and were expected to reach 5% by 2010.

Both General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F) have hinted recently at more hybrid vehicles entering the global auto pipeline from both manufacturers. This is no surprise; customers are dealing with high gas prices every day now (with little to no relief in sight) and auto manufacturers are responding with hybrid auto technology to fill the customer need for better MPG (miles per gallon). Although Toyota Motor Corp. (NYSE: TM) has been at the forefront of marketing so far (with its Prius hybrid, for example) and GM and Ford are pushing hybrid technology as well, what about other manufacturers?

Nissan Motor Co. (NASDAQ: NSANY) CEO Carlos Ghosn, who has been given credit for completely revitalizing and saving Nissan from complete failure back in 2001 or so, indicated yesterday that the company he leads is working hard to develop the next generation of smaller, lighter auto batteries. This move will make Nissan (hopefully) more competitive in the technology field that is sure to be used more and more in the future for not only auto batteries, but 100% electric-powered vehicles as well.

Nissan's specific move here is to have the smaller, more efficient and lighter lithium-ion battery technology currently used in cell phones and laptop computers used in passenger cars and trucks. In terms of Nissan vehicles that use hybrid technology, the current lineup includes the 2008 Nissan Altima. That car -- one of the most popular in all of Nissan's product portfolio -- has a hybrid option that uses older Nickel Metal Hydride technology that Nissan licenses from competitor Toyota. If Ghosn does not only get the newest generation of automotive batteries to market faster than the competition -- and possibly make Nissan vehicles with that technology on board -- Ford and GM may become customers as both domestic automakers strive to get a more solid footing in the hybrid vehicle market.