Toyota and Subaru will jointly develop a new electric vehicle platform suitable for mid-sized and large passenger cars, including sedans and crossovers.
In addition to this, the two Japanese automakers will also use the new EV architecture to develop a new c-segment crossover together, with each brand selling a version of this vehicle.
According to the two companies, the new platform will use Toyota's electrification technologies and Subaru's all-wheel drive expertise. Both carmakers will shift their existing electric car development over to this new project.
It's not clear when the new platform will be ready, or when the new electric crossovers will go on sale.
The automakers say they decided to "pursue a business model that goes beyond convention, crossing over industrial boundaries together" as electrification needs, infrastructure and government incentives vary greatly by country, requiring them to "respond with a sense of speed".
Subaru also rebadges the Toyota Tank/Daihatsu Thor as the Justy to give it a space efficient entry-level model in its home market. Subaru also briefly produced Camrys at its plant in Lafayette, Indiana.
Toyota currently owns almost 17% of Subaru. Despite investing heavily in hybrid car technology, and wearing financial loses to establish a dominant position in the field, Toyota has been, until now, reluctant to embrace pure electric vehicles.