Toyota engineers in Japan and the U.S. are working on a so- called inductive motor that’s lighter and more efficient than the magnet-type motor now used in its Prius, said John Hanson, a company spokesman. Research is at an “advanced stage,” he said, without saying when vehicles with the motors may be sold.

“It’s a long-term approach,” said Hanson, who is based at Toyota’s U.S. unit in Torrance, California. “When you’re looking at a geopolitical issue like rare-earth supply, that can lead to developments that create very good solutions.”

The motor could help cut Toyota’s dependency on rare-earth materials from China, which controls more than 90 percent of the global market for the metals. China’s government cut export quotas for the first half of 2011 by 35 percent last month. That follows a 72 percent reduction in the second half of 2010, causing the price of some of the metals to more than double.

In addition to the Prius, rare-earth minerals such as neodymium and dysprosium are used in motor magnets in Nissan Motor Co.’s all-electric Leaf car, General Motors Co.’s plug-in Volt and Honda Motor Co.’s Insight hybrid, as well as in mobile phones and rechargeable batteries. Toyota confirmed last year it has a task force to find rare-earth supplies outside China.

Toyota rose 1.3 percent to 3,580 yen as of the 11 a.m. trading break in Tokyo. The stock has gained 11 percent this year.

Battery-Powered RAV4

In 2012, Toyota will sell a battery-powered RAV4 compact sport-utility vehicle with an inductive motor supplied by Tesla Motors Inc. that uses no rare-earth minerals. Tesla’s all- electric Roadster sports car and future Model S sedan use a similar motor, also without rare-earth materials.

The RAV4 EV motor is separate from Toyota’s next-generation electric motor project, Hanson said.

Toyota is developing efficient, cheaper, lighter motors, along with advanced batteries and power electronics, as electric propulsion is essential for next-generation autos, Takeshi Uchiyamada, Toyota’s executive vice president for research and product development, said in an interview this week in Detroit. The company is making progress in all three areas, he said, without elaborating.

The carmaker revealed this week it’s also working on a magnesium-sulfur battery capable of holding twice the energy of lithium-ion cells. Under ideal conditions, such a battery can store 4,000 watt hours/liter of electricity, Jeffrey Makarewicz, a Toyota battery engineer, said in an interview Jan. 10.

The Wall Street Journal reported earlier today that Toyota is developing motors that don’t use rare earth minerals.