Auto giants Toyota and BMW said Thursday they have agreed to collaborate on research for cleaner, next-generation car batteries, underlining the growing push in the industry for green technology.
The agreement brings together Toyota Motor Corp., Japan's No. 1 carmaker and a leader in gas-electric hybrids, and BMW AG of Germany, a European maker that has a strong luxury brand image in both Japan and Europe.
"We are now joining forces to further develop environmentally-friendly technologies and to expand our innovation leadership in each of our segments," Norbert Reithofer, chairman of BMW, said in a statement.
The two automakers will also work on improving lithium-ion battery technology, typically used in batteries for electronic gadgets and relatively new to autos.
Toyota has struggled to find a good lithium-ion battery for its green cars and is using technology from Japanese electronics maker Sanyo Electric Co. in its latest plug-in hybrid, for which Toyota has recently started taking orders. Toyota had worked with Panasonic Corp. on a battery before the electronics maker acquired Sanyo, partly to get better lithium-ion technology.
"This collaboration will allow for the development of the next-generation battery faster and at a higher level," Toyota Executive Vice President Takeshi Uchiyamada told reporters at a Tokyo news conference.
Toyota and BMW have been engaged in extended discussions on technology and plan to collaborate on other medium-term and long-term projects, he said.
BMW will also begin supplying "clean" diesel engines to Toyota in 2014 for models for the European market. Diesel engines for passenger cars are huge in Europe but have yet to take off in the U.S. or Japan, the two major markets where Toyota is strong. Toyota does not have enough clean diesel engines for its European offerings.
Under their agreement, BMW is supplying 1.6 liter and 2.0 liter fuel-efficient diesel engines for Toyota. They declined to give details on models.
The announcement was timed with the Tokyo Motor Show, which opens to the public Saturday.
Competition in new batteries is expected to heat up in coming years amid growing concern about global warming. Governments around the world are offering tax breaks and subsidies to encourage electric cars and plug-ins.
BMW said it is entering its first collaboration with a Japanese automaker because of Toyota's prowess in hybrids.
Toyota has sold more than 3.4 million hybrids worldwide so far, including models other than the pioneering hit Prius.
Toyota does not have an electric vehicle in its commercial lineup, although it is planning one for next year, for commuting short distances.
Japanese rival Nissan Motor Co. has made EVs the pillar of its green strategy and has a head start, offering the Leaf electric car from last year.
But electric vehicles are still a fledgling technology, meaning the race has just begun and others like Toyota and BMW can play catchup.
Nissan has sold about 20,000 Leaf cars around the world so far.
Toyota and BMW executives said sharing research can speed up development.
"The agreement between our two companies marks a milestone for our future collaborations," said Ian Robertson, a BMW board member who oversees sales and marketing.
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