Toyota Is Developing a New Compact Engine for the GR Celica — The Brand’s Performance Revolution Isn’t Slowing Down

Toyota is steadily reshaping long-held assumptions about engines — and it’s doing so without limiting itself to hybrids. Alongside its well-established HEVs, which have practically become the brand’s signature, the company is aggressively expanding its lineup of plug-in hybrids (PHEVs) and battery-electric models (BEVs). Yet Toyota’s engineers aren’t ready to abandon traditional combustion engines, determined instead to preserve the kind of pure driving passion enthusiasts still crave.

Akio Toyoda’s influence on that direction can’t be overstated. His vision led to standout models like the GR Yaris and GR Supra, while Toyota’s return to top-level rallying (WRC) injected fresh momentum into the brand. The GR Yaris, for example, was a direct result of that motorsport program.

Earlier this year, Toyota turned heads with the suGR Yaris M-Concept — a mid-engine take on the hot hatch that immediately drew comparisons to the legendary Renault Clio V6. Instead of the familiar three-cylinder G16E-GTS turbo, the concept featured an all-new G20E: a 2.0-liter, four-cylinder turbocharged motor. Early estimates suggest it could deliver anywhere from 400 to 600 horsepower, making it more powerful — and more compact — than Toyota’s own 2.4-liter performance unit. That kind of output would suit not just road-going GR models, but also cars built for Super GT or Super Formula competition.

There’s a strong chance the G20E could find its way into a future GR Corolla — a model not yet officially launched in Europe but already on sale in the U.S. and Japan. And Toyota appears to have another secret powerplant in development: an engine said to be even more compact than the G20E. Whether it will be a three- or four-cylinder unit remains unclear, but its layout will likely resemble the prototype tested in Japan’s Super Taikyu endurance series in a GR Yaris. Rumor has it this engine could ultimately serve as the foundation for a revived GR Celica.

Mitsuto Sakai, who heads Toyota’s engine development program, says the goal is to build an extremely compact, high-output unit with exceptional combustion efficiency. But the team is already wrestling with cooling challenges — prototype cars have required oversized air ducts to manage heat, giving the GR Yaris a look closer to a WRC rally car. Another issue is accelerated front-tire wear in versions with a front-mounted engine and all-wheel drive, a problem that nudges Toyota further toward mid-engine setups for its future performance lineup.