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Battery models carry electricity in their lithium-ion battery packs while fuel cell vehicles make electricity on board in a chemical reaction between hydrogen and oxygen, with only water vapor as a byproduct. While hydrogen vehicles have a range comparable to gasoline vehicles and need only a few minutes to refuel -- compared with hours for most battery autos -- there are few hydrogen pumps currently open to the public.

California has said it will provide as much as $200 million over the next decade to help open stations across the most populous U.S. state.

Fuel cell autos will need three to five years to build a market presence in California, and at least a decade to get to U.S. sales of half a million or more annually, Lentz said. Still, advances in the technology and an industrywide push, with Daimler AG, General Motors Co. and Nissan also planning to sell fuel cell models, may help the vehicles get a market foothold faster than hybrids, according to Lentz.

Subaru will stop building the Camry in Indiana by 2017

Subaru said earlier this year that it would boost the plant's annual capacity to build Subaru vehicles to 300,000 by the end of 2016, up from 170,000 currently. On top of that, the company has capacity to build 100,000 Camrys a year

Subaru also said earlier this year it would add production of the Impreza to the factory, its only plant in North America

The additional capacity Subaru plans to add by 2016 would come from the Toyota line, meaning that Subaru vehicles would be made in mixed production with the Camry on the same line.

Subaru needs more capacity, as it aims for annual U.S. sales of 500,000 by 2016. That's up from an estimated 420,000 units expected this year.

To price cars competitively, it tried offsetting the cost of its sophisticated mechanics by stripping out features and using entry-level trims in the Passat and Jetta.

ranks 23rd out of 33 brands, with 120 problems reported for every 100 new cars within the first 90 days.

"The Passat is up against a redesigned Nissan Altima, a redesigned Honda Accord and a redesigned (Ford) Fusion - all undercutting VW on pricing," said Alec Gutierrez, an analyst with Kelley Blue Book, which tracks U.S. car values.

The strategy underscores how Toyota is playing catch-up in a fundamental field, as rivals gain on the automaker's top fleet average fuel economy in the United States with big advancements in such fuel-saving technologies as direct injection, turbocharging and stop-start systems. For years, Toyota has focused on its best-selling gasoline-electric hybrid systems. It hasn't abandoned that track.

Toyota is seeking fuel economy increases of up to 30 percent and cost cuts on key components of up to 50 percent.

"Just like putting something beautiful on top of your hairdo, by using kanzashi through such things as turbocharging or downsizing, you can improve the performance of the engine."Kanzashi add-ons may include direct fuel injection, exhaust gas recirculation systems or stop-start technologies that turn off the engine when the vehicle stops.

The EPA's annual report on fuel economy trends, which calculates automakers' fleet average fuel economy based on sales, shows Toyota losing ground to rivals such as Nissan and Mazda. For example, in 2010, Toyota's U.S. fleet average fuel economy was 25.4 mpg. In 2013, it was 25.2 mpg. Meanwhile, Mazda improved from 24.4 mpg in 2010 to 27.5 mpg in 2013, and Nissan rose from 23.3 mpg to 24.6 mpg during the period.

"Eventually we think this is where the technology is going, but right now we don't know what the reaction of U.S. customers will be," he said. "So probably right up until the last moment, we will have to be ready with both and watch customer feedback."

The market for automotive chips is projected to grow 6.1 percent to $27.9 billion this year, according to IHS Corp. Within that business, sales of chips for automated driver-assistance systems, or ADAS, will increase an average of 13 percent a year through 2020, making it the fastest-growing area.

Intel, Qualcomm and NVIDIA, which make some of the fastest processors available. All three say they’ve got products in the market or coming that meet the most stringent automotive requirements.

NVIDIA said its processors are now powerful enough that they can be partitioned -- devoting part to functions that must work no matter what, and others to information and entertainment, where hiccups are less dangerous.

Qualcomm

has won the majority of orders to add the latest wireless modems into cars, and expects that by 2017 as many as 60 percent of cars will have cellular connections.

It all comes from the cloud,” Singh said. “Otherwise you have to put terabytes of data into the car’s trunk.”

Top-of-the line Audi models use more than 6,000 semiconductors.

“Make no mistake -- my objective is to drive this into volume, not just luxury German vehicles,” said Elliot Garbus, Intel’s vice president of automotive. “We need to drive it into entry-level vehicles.”

Intel is aiming to win more orders by offering carmakers whole systems -- software and computers built on its chips -- that it says can cut the time and cost it takes to build features into cars. New functions such as tracking eye movement to monitor a driver’s attention will require faster processing, he said.

Qualcomm

is working on chipsets that provide multiple functions for cars, including cellular connections, and expects that to be the basis for an expansion of its revenue in the industry

The upcoming rollout, which will deploy the technologies by March 31, 2016, is part of Denso's drive to boost sales of sensors, the crucial eyes and ears of tomorrow's safety systems.

Cars without these features will be hard-pressed to achieve the top five-star rating. And European adoption of more stringent rules is expected to force other markets, such as the United States and Japan, to raise the bar as well.

But it trails European rivals such as Robert Bosch GmBH and Continental AG in advanced safety sensors. Denso's bread-and-butter products are drivetrain components and air conditioners.

But deployment is rapidly moving downmarket because of stricter European Union safety rules taking effect in 2015. The Euro New Car Assessment Program, or Euro NCAP, rates vehicle safety and increasingly will test for crash avoidance technologies.

The components include systems using camera-based optical sensors, millimeter wave radar and laser radar.

That is because the regulations set a baseline for sensor performance that must be met by all carmakers. And the clear specifications make it easier to develop standardized sensors. Standardization, in turn, allows for higher volume and lower costs, meaning a wider array of customers can use the same part.

The system senses if a collision is imminent, and if the driver doesn’t respond, it autonomously brakes the car at speeds up to 124 mph. It also can brake to avoid a stationary vehicle ahead and to prevent rear collisions.

The C300 all-wheel-drive goes on sale in a few weeks and will cost $41,325, including shipping.

The more powerful C400 4Matic starts at $49,515, including shipping, and also debuts later this month. It is a new model.

In the next two years, a C-class coupe, convertible and plug-in hybrid will be rolled out in the United States