Toyota Motor Corp. and Subaru Corp. have started jointly developing a new electric car, aiming to put it on the market possibly in 2021, sources said Monday.
The joint production of a midsize car is an expansion of their collaboration in recent years in the development of basic EV technology.
Subaru, of which Toyota is a top shareholder, is set to freeze its own EV development project due to the large cost of going it alone, deciding to gain experience from working with Toyota first, according to the sources.
Co-developed EVs will be sold under their respective brands, the sources said.
The two companies have been working together on interior and exterior equipment for EVs, with Subaru sending several dozen engineers to Toyota.
With the transition from conventional vehicles to EVs expected to occur slowly, many automakers are choosing to develop EVs by forming a partnership to share investment and other resources.
Toyota has led the industry in the area of hybrid vehicles but is said to be lagging behind rivals in the race to commercialize mass-market EVs.
Volkswagen and Ford Motor Co. have joined hands for EVs and autonomous vehicles.
Honda Motor Co. and General Motors Co. are jointly working on EV batteries, while the alliance of Nissan Motor Co., Renault SA and Mitsubishi Motors Corp. plans to expand its EV lineup using common chassis.