Toyota & BYD Establish Joint Company in China for Electric Vehicle Development
One of the biggest producers of electric vehicle batteries and one of the world's biggest automakers are joining forces in a new joint venture to build electric vehicles for the China market.
China's BYD Company Ltd. (BYD) and Japan's Toyota Motor Corporation announced that they have signed an agreement to establish a joint company to research and development of electric vehicles (BEVs).
The companies first announced a partnership in July. At the time, Toyota and BYD said they would develop sedans and sport utility vehicles, which would then be sold under the Toyota brand in China before 2025. The new joint company cements the deal.
The new R&D company will work on designing and developing electric vehicles, including platform architecture and related parts. The new company aims to be established in China by 2020, with BYD and Toyota to each contributing 50% of the total capital needed.
Toyota and BYD aim to work together to further develop a lineup of BEVs that are attractive to Chinese customers and contribute toward reducing air pollution.
The partnership will leverage the strength of each company. Toyota plans to staff the new joint venture by transferring its own engineers already working on electric vehicle development. BYD will tap employees currently involved in research and development of batteries.
"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.
The C-HR and IZOA will be the first battery-electric vehicles for sale in China under the Toyota brand.
BYD was founded in 1995 as a battery company and has grown into a total energy solutions provider, manufacturing a wide range of clean energy products including, electrified vehicles, solar energy and large-size energy storage cells. The company is backed by investor Warren Buffet. His company Berkshire Hathaway owns a 2% stake in BYD.
The company also builds electric buses, which are in service in dozens of countries including the U.S., Britain, Japan, India and Chile. Last month, BYD said so far it delivered more than 50,000 electric buses to global clients. BYD also building an elevated monorail system in China called SkyRail. BYD is marketing SkyRail as a solution to China's traffic problems in urban areas.
In 2008, BYD became the first company in the world to sell and mass produce plug-in hybrid electrified vehicles (PHEVs). Since 2015 onwards, BYD's sales of BEVs and PHEVs have been ranked first in the world.
"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. We hope to further advance and expand both BYD and Toyota from the efforts of the new company with BYD."
Toyota has sold more than 14 million electrified vehicles worldwide and has accumulated extensive knowledge concerning the development, production, and sale of both HEVs and their related core components. Toyota's hybrid-electric Prius first went on sale in Japan in 1997.
Toyota is now initiating its electrification strategy globally. In China, the world's biggest market for electric vehicles, Toyota is developing vehicles in collaboration between Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC) and the R&D centers established at Chinese joint-venture companies with China FAW Group Corporation (FAW) and Guangzhou Automobile Group Co., Ltd. (GAC).
In June, Toyota announced plans for half of its global sales to come from electrified vehicles by 2025. The automaker is planning to launch its first EV in China next year, an electrified version of the C-HR/IZOA compact crossover.
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