Buoyed by its success with electric-gasoline hybrid vehicles, Toyota is betting that drivers will embrace hydrogen fuel cells, an even cleaner technology that runs on the energy created by an electrochemical reaction when oxygen in the air combines with hydrogen stored as fuel.
Unlike internal combustion engines which power most vehicles on roads today, a pure hydrogen fuel cell emits no exhaust, only some heat and a trickle of pure water.
Fuel cells also boast greater efficiency than the internal combustion process, which expends about two-thirds of the energy in gasoline as heat.
Toyota's fuel cell car will go on sale before April next year.
Despite advantages that are seemingly compelling, the technology has struggled to move beyond its prototypes after several decades of research and development by industry and backing from governments.
For the auto industry in particular, there have been significant hurdles to commercialisation including the prohibitive expense of such vehicles. On top of that, fueling stations are almost nonexistent.
Doubters also quibble about the green credentials of fuel cells because hydrogen is produced from fossil fuels.
But Satoshi Ogiso, the engineer leading the Toyota project, is confident there's a market that will grow in significance over time.
Part of Ogiso's optimism stems from his background. He worked for 20 years on Toyota's Prius hybrid.
The Prius, which has an electric motor in addition to a regular gasoline engine, was met with extreme skepticism at the start. But it went on to win over the public as a stylish way to limit the environmental damage of motoring.
Worldwide sales of Toyota's hybrids have topped 6 million vehicles since their debut in 1997.
"The environment has become an ever more pressing problem than in 1997," Ogiso said in an interview at the automaker's Tokyo office.
"Hydrogen marks an even bigger step than a hybrid. It is our proposal for a totally new kind of car. If you want to experience this new world, if you want to go green, this is it."
Toyota, which began working on fuel cells in 1992 but won't disclose how much it has invested, is not the first automaker to produce such a vehicle.