A couple of months back, I made the case for why ToyotaMotors (NYSE:TM), a $140 billion company with more than $160 billion in annual sales, is actually a rule breaker of a company. Briefly stated, the Japanese automaker has become the dominant force in manufacturing and marketing hybrid gas-electric automobiles.

It stole that title from hybrid pioneer Honda (NYSE:HMC), forced Ford (NYSE:F) to follow its lead, and left competitors GM (NYSE:GM) and DaimlerChrysler (NYSE:DCX) scrambling to play catch-up. Toyota's also breaking new ground in the still-embryonic robotics market by using robots to compete with low-cost Chinese labor in defending its car-making market share. The company's also preparing to dominate the market for selling robots to consumers, taking the offensive in an emerging market. All of these are actions more befitting a tiny, rule-breaking start-up than the titan of industry that Toyota can certainly claim to be.

Yesterday, Toyota proved once again that it's got the right stuff to claim the title of "world's biggest rule breaker." An article in India's Financial Express quotes Toyota Executive Vice-President Kazuo Okamoto as saying, "In the future, the cars you see from Toyota will be 100% hybrid."

A pipe dream, you say? Mere boasting? Hardly -- because Toyota is backing up its words with actions. The company has sold more than 400,000 hybrids in the eight years since it began commercializing the technology. In 2006 alone, Toyota expects to produce 400,000 more cars. So not only is the company putting its manufacturing dollars where its mouth is, but its production curve also proves how quickly it intends to convert its automobile lines to hybrid production.

Averaging $5.2 billion in free cash flow against a market cap of $139.48 billion (according to Capital IQ), Toyota sports a price-to-free cash flow ratio of 27 today. Factor in its $64 billion in net debt (after cash), and its enterprise value-to-free cash flow ratio balloons to 39. Either way, it's hard to argue that Toyota stock is a bargain at today's prices, regardless of how attractive Toyota, the company, appears.

But it would be equally foolish (small "f") to ignore the possibility that the hybrid market will balloon from 400,000 Toyotas next year to nearly 20 times that number (Toyota sold 7.4 million cars last year) in the near future, or that the market will become even larger as the other automakers continue to follow Toyota's lead. For that reason, I continue to think that the better way to play the hybrid revolution is to watch Toyota for news and invest rather in Toyota's underpriced hybrid battery suppliers: Sanyo (NASDAQ:SANYY) and Matsushita (NYSE:MC).

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Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article.