Toyota Motor Corp. and electronics giant Panasonic Corp. said Tuesday they will jointly establish a new company to make batteries for automobiles, including electric vehicles, by the end of 2020.

With the joint venture, the firms aim to counter Chinese and other foreign rivals. Toyota and Panasonic hope to accelerate the development of high-performance batteries for supply to automakers at home and abroad, while redoubling efforts to increase the price competitiveness of their batteries.

The joint company will be owned 51 percent by Toyota and 49 percent by Panasonic.

Panasonic will transfer its production facilities for vehicle batteries, excluding those for batteries supplied to major U.S. electric vehicle-maker Tesla Inc., to the new company.

The joint venture will also take over Toyota’s battery-related development and production facilities.

The combined number of Toyota and Panasonic employees to be reassigned to the new firm will total about 3,500.

Toyota, which plans to boost sales of its electric vehicles to 5.5 million units in 2030, aims for stable procurement of batteries.

Automotive battery operations involve a series of hurdles, such as improving performance, reducing production costs, ensuring stable supply and establishing a recycling system.

Believing that these challenges cannot be solved by one company, Toyota and Panasonic decided to join forces, sources said.

Batteries to be made by the new company are expected to be supplied to Daihatsu Motor Co., a Toyota subsidiary, Mazda Motor Corp., Subaru Corp. and other automakers.

Toyota and Panasonic started talks on the possible tie-up in December 2017.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.