Never one to be outplayed, Toyota is working on the next-generation Toyota Prius hybrid due for release by 2016. With each new generation of Prius, the auto giant has made slight efficiency gains, but that is becoming harder to achieve. Which is why Toyota has begun testing a more efficient silicon carbide power semiconductor for its hybrids.

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According to Toyota, today’s power control units (PCU) account for about 25 percent of electrical power losses with 20 percent occurring in the semiconductors. Toyota says that the new silicon semiconductor chip that the company is currently testing will improve the fuel efficiency of its hybrids, like the Prius by as much as 10 percent. The chips, made from carbide, have superior characteristics such as one-tenth the electrical power loss and 10 times the drive frequency. Toyota said the chips would also allow it to reduce the size of current automotive power control units by 80 percent.

Related: Toyota to Test a Wireless EV Charging System that Recharges Batteries in Just 90 Minutes

In the most recent tests, the new technology has resulted in a five percent improvement in fuel efficiency, but by the time they release the technology in 2020, Toyota hopes the fuel efficiency improvements will be significantly higher.

+ Toyota