Touted by Japanese makers as "the next big thing" after the traditional internal combustion engine, hybrid gas-electric vehicles offer from 1.5 times to twice the fuel efficiency of gasoline cars of the same size, cutting carbon dioxide emissions. But it is still very much a niche market and the question of just how fast and how far it will develop is crucial for an industry that must decide how to divide up research funds between hybrids and competing technologies such as fuel cell vehicles, according to a Reuters report. Toyota is the most ambitious, aiming to build 300,000 hybrids annually in 2005, although it has said the target may include sales to other automakers. Tax credits offered in Japan and the United States will help the vehicles gain acceptance, while European carmakers' aims to cut carbon dioxide emissions to 140 grams per kilometer by 2008 will push them towards hybrids, according to industry analysts.