As the auto industry races to go electric, Toyota is steering its own course.

It’s betting big on vehicles powered by hydrogen.

Company President Akio Toyoda even drove one over the weekend at a circuit in Japan.

The car used a conventional engine adapted to run on the alternative fuel.

Toyoda says the industry needs to keep its options open:

"The enemy is carbon, not internal combustion engines. We shouldn't just focus on one option. Based on various technologies that we have already used so far I think there might be a way to make use of internal combustion engines for carbon neutrality, and even develop it.”

A combustion engine fuelled by hydrogen produces almost no emissions bar water vapour.

Toyota says it aims to be a carbon-neutral company, not just a maker of EVs.

The firm refused to sign a pledge on phasing out traditional engines at the U.N. summit on climate change, saying much of the world isn't ready to go electric.

Hydrogen-fuelled combustion engines would also mean less disruption to car production than a switch to EVs - appealing in Japan, where mass layoffs are politically difficult.

But the technology requires bulky pressurised tanks, and there’s little infrastructure for supplying the fuel to users.

It does also produce small traces of pollution, meaning it can't quite be described as zero-emission.

For all those reasons, most automakers are betting it all on EVs.

The coming years will see whether Toyota's alternative can stay in the race.