Toyota will introduce a next-generation Corolla for the 2028 model year with hybrid and electric powertrains built around a new 1.5-liter four-cylinder engine family.

The new engine comes in naturally aspirated and turbocharged versions, both designed from the start for hybrid duty. The naturally aspirated 1.5-liter will replace the current 1.8-liter hybrid engine, which pairs with two electric motors to produce 138 horsepower in the current Corolla Hybrid. The turbocharged variant expands the lineup options.

Toyota paired these engines with redesigned electric drive units, which the company made lighter and more compact than current systems. The focus on shrinking both components stems from aerodynamics: a smaller footprint lets Toyota run hybrid and fully electric variants on the same platform without reshaping the car's hood or interior.

Toyota targets more than 15 percent better fuel economy from the new hybrid system. The company attributes gains to lower mechanical friction, improved thermal management, reduced electrical losses, and better aerodynamic drag from the sleeker bodywork.

By sharing one platform across electric, plug-in hybrid, and traditional hybrid variants, Toyota says it can lower development and production costs while maintaining flexibility to adjust manufacturing to match customer demand for specific powertrains.