Toyota to form electric car technology venture with Mazda

TOKYO: Toyota Motor Corp has established a new venture to develop electric vehicle technology with partner Mazda Motor Corp, seeking to catch up with rivals in an increasingly frenetic race to produce more battery-powered cars.

Policymakers in key markets like China are pushing a shift to electric cars over the next two to three decades, while relatively new rival Tesla Inc is gaining momentum, pressuring traditional automakers to crank up plans for fully electric vehicles (EVs).

At the same time, declining battery costs are enabling more power to be packed into cars, making an electric car future easier to imagine.

Toyota said in a statement the new company will develop technology for a range of electric cars, including minivehicles, passenger cars, SUVs and light trucks.

Toyota will take a 90% stake in the joint venture, called EV Common Architecture Spirit Co Ltd, while Mazda and Denso Corp, Toyota’s biggest supplier, will each take 5%.

The plans build on a partnership announced in August when Japan’s biggest automaker agreed to take a 5% stake in Mazda and two said they would jointly develop affordable electric vehicle technologies.

Although Toyota is providing most of the financial firepower and existing EV knowhow, Mazda’s engineers have gained the admiration of the industry with breakthrough technologies such as its compression ignition engine announced last month.

Shares in Mazda surged to end the day 3% higher, while those in Denso rose 1.8%. Toyota shares were flat.

Both automakers are somewhat behind rivals, with neither having a fully electric passenger car on the market yet.

After years of focusing on bringing hydrogen fuel cell vehicles to the market, Toyota last year set up a division to develop electric cars which is led by President Akio Toyoda, and said it plans to introduce EVs in China in the coming years.