Toyota and BYD have formed a joint company tasked with developing battery electric vehicles (BEVs) from the platform-up. It will be based in China and be established in 2020.
The joint-venture will be funded on a 50:50 basis by the two, and run by existing staff, mostly engineers, from both parent companies.
The venture between the world’s biggest car maker (Toyota Motor) and the claimed biggest maker of BEVs and plug-in hybrids (BYD) should speed up the pace of development for both companies.
While hybrid leader Toyota has been cautious in rolling out BEVs, BYD is a serious player, making battery-powered vans, cars, and even buses at scale for domestic consumption and export.
In July, the companies said they would develop battery-electric sedans, SUVs and crossovers, which would then be sold under the Toyota brand in China before 2025.
Pictured: BYD's E-Seed electric concept supercar
"We aim to combine BYD's strengths in development and competitiveness in the battery electric vehicle market with Toyota's quality and safety technology to provide the best BEV products for the market demand and consumer affection as early as we can,” said BYD senior vice president Lian Yu-bo.
"With the same goal to further promote the widespread use of electrified vehicles, we appreciate that BYD and Toyota can become "teammates", able to put aside our rivalry and collaborate,” added Toyota executive vice president Shigeki Terashi.
While a few years behind some competitors, such as Nissan and Hyundai, Toyota’s global approach on the topic has been to be cautious until its proverbial ducks are in a row. It’s now promising 10 EVs in global markets by the "early 2020s”, with at least two made under joint-ventures with Subaru and Suzuki respectively.
Key challenges have been the stable supply and durability of Toyota’s in-house and joint-venture-made batteries, and it is targeting 90 per cent energy storage capability after a decade of use from lithium-ion cells.
The company also claims to be on the cusp of viable solid-state technology, and is putting in place measures for the re-use of used batteries.
It also notes the world’s biggest BEV markets such as China, the US, Norway and Germany offer government grants or tax breaks on BEVs (among other bonuses that also include free parking) to even the playing field and subjugate conventional market forces.
The company has been able to rely on its clear leadership in petrol-electric hybrid cars, made at scale, to meet regulatory hurdles to this point. Indeed its corporate CO2 average is Europe’s lowest among large-scale brands for this reason, below 100g/km.
Toyota globally expects to hit its target of having electrified vehicles accounting for over half of all sales by 2025, five years ahead of initial projections. It predicts it will sell roughly 4.5 million hybrid and plug-in hybrid models in 2025, with a further one million from all-electric and hydrogen fuel-cell vehicles.