In a new venture to develop electric vehicle technology, Toyota Motor Corp has partnered with Mazda Motor Corp in order to catch up with the rivals in the increasingly competitive market of battery powered cars across the globe.
Policymakers across key markets like China are now pushing a shift towards the electric cars in the next two to three decades, while Tesla Inc is gaining momentum, which has pressured the traditional automakers to build up plans for fully electric vehicles. At the same time, the reducing costs of battery are enabling more power to be packed into cars, which is making the future of electric car easier to imagine. Toyata said that the new company will develop the technology for a wide range of electric cars which include SUVs, light trucks, passenger cars and mini vehicles. In the joint venture, Toyota will take 90 percent stake while Mazda and Denso Corp will take 5 percent. The joint venture will be called EV Common Architecture Spirit Co Ltd. Mazda and Denso Corp is the biggest suppliers of Toyota.
The plan to build a partnership was announced in August when Toyota agreed to take a 5 percent stake in Mazda and they agreed to jointly develop affordable electric vehicle technologies. Toyota is providing most of the financial power and existing electric vehicle know how, Mazda’s engineers have gained a strong admiration in the industry with a breakthrough technology like compression ignition engine, which was announced last month. On the day of this announcement, Toyota shares were flat while the shares in Mazda surged to end the day 3 percent higher and Denso shares rose 1.8 percent. None of the automakers have a fully electric passenger car on the market yet and are behind their rivals.
After focusing on hydrogen fuel cell vehicles for many years, Toyota set up a division for the development of electric cars last year and is led by the President Akio Toyoda. It plans to introduce the electric vehicles in China in the coming years. The division will continue to operate as a separate entity from the new joint venture. Both the teams will cooperate on the development of technology. Toyota has a very high R&D budget as compared to Mazda, although it has plans to launch electric vehicles in 2020.
In comparison, Nissan Motor Co has the world’s top selling electric car; the Leaf and its partner Renault SA also expects the electric vehicles to account for 30 percent of the total sale by 2022. There is competition from unexpected quarters as well. James Dyson has said his company is working on developing an electric car which will be launched by 2020. Every auto manufacturer aims to make the most of the electric vehicle market in the coming years. The market is currently led by Tesla which has the latest technology and has spent a significant sum on the research and development of the same.