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The partnership will compete directly with rival Chinese producers, bringing more variety to the market, according to reports.
International automobile manufacturer Toyota Motor (TSE:7203,NYSE:TM) and global tech company Panasonic (TSE:6752) may launch a joint venture (JV) next year to produce in-demand batteries for electric vehicles (EVs).
The partnership will compete directly with rival Chinese producers, bringing more variety to the market, according to reports.
Toyota will take a 51-percent majority stake in the EV battery JV, with Panasonic owning the remaining 49 percent.
A source familiar with the matter told Reuters that the company could potentially supply its new batteries to Toyota’s EV technology partners Mazda (TSE:7261) and Subaru (TSE:7270), giving them a large chunk of the emerging electric vehicle market.
While the JV is still in the speculation stage, in 2017 both companies announced they were launching a feasibility study to collaborate on automotive prismatic batteries with higher energy density.
“[B]oth companies intend to broadly study concrete areas of collaboration from automotive prismatic lithium-ion batteries to next-generation batteries, such as solid-state, including procurement of the resources for such, all the way to reuse and recycling,” Toyota President Akio Toyoda said at the time.
The proposed battery maker would allow Toyota to achieve its projected annual sales target of around 1-million zero-emission battery EVs and fuel-cell vehicles by 2030.
For Panasonic, the exclusive battery cell supplier for Tesla’s (NASDAQ:TSLA) current production models, the JV would allow it to supply additional automakers easing its reliance on the EV maker, and giving them a broader market segment.
According to the source, Panasonic will move the majority of its prismatic battery-related equipment and facilities in Japan and China to the joint venture, while keeping the production of Tesla’s batteries under the Panasonic umbrella.
Panasonic already makes prismatic batteries for Toyota, further batteries could be used to power Toyota’s latest EV concept vehicle, the ultra-compact i-Road, a hybrid between a motor bike and car designed for urban living.
Toyota shares were up 0.74 percent on Monday (January 21) to US$125.35, while Panasonic shares were up 2.23 percent trading at US$9.81.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.