Toyota has long clung to the Nickel-Metal-Hydride (NiMH) batteries, claiming that lithium-ion batteries are too expensive. While that might be the case, there are dozens of research projects going on that aims to increase energy density, increase power density, and reduce the cost of batteries. What it means is that Toyota has primarily offered hybrid cars, where the other car companies have moved on to plug-in hybrids or all electric cars.
In the meantime Toyota is looking to solid state and lithium-air batteries. This is based to research information we find on the Toyota-Global website.
The chart shows the current range of energy and power density, with NiMH providing energy density of slightly under 100 Watts/Liter and Power Density around 2000 Watts/Liter. Lithium-Ion is described in this chart as providing double that energy and power density. However both Solid State and "Metal-Air" (a.k.a. lithium-air) batteries providing far more.
The goal shown is a battery pack 1/5th the size of current battery packs. The effect of that goal is to preserve as much of the volume of the car for use of the humans, such as to carry more people or cargo.
The research began in 2010, so at this point (2013) it's been going on for awhile.
What Toyota has to say is: By modifying liquefied electrolytes into solid electrolytes, it allows
each cells to connect without the need for individual casing, which
results in creating a more compact packaging.
The picture tries to show this. The two sides have the same number of cells, for the same pack voltage. But the box on the right is smaller than the box on the left, meaning the box on the right has a higher energy/power density. This efficiency increase is coming from improved packaging.
What makes that possible is the use of solid electrolytes. Rather than a liquid sloshing around, a solid state battery has blocks of solid material pressed together. This requires less packaging to achieve the same effect as the liquid electrolyte batteries.
The problem with this picture is that with current lithium-air battery research, the "air" must be pure oxygen, and cannot be any old air from the atmosphere. This is because of contaminants and especially humidity. Lithium-metal burns in certain conditions. To resolve this problem lithium-air battery researchers have gizmos to extract pure oxygen from the atmosphere to provide the proper stuff to the lithium-air battery. That gizmo adds to the packaging complexity of lithium-air batteries in a way that is not shown on Toyota's picture.
Source: Research Progress : Next Generation Secondary Batteries