NAGOYA -- Toyota Motor and electronics maker Panasonic are forming a tie-up to set key standards for batteries used in electric vehicles, a move that could help the Japanese auto industry catch up to foreign rivals.
The partners are negotiating final details and will unveil an agreement shortly. Toyota subsidiary Daihatsu Motor and capital partner Mazda Motor will likely be asked to sign on as well. Such other automakers as Honda Motor could also be invited to help craft battery standards, potentially turning the partnership into a major consortium for the development of electric-vehicle batteries.
If enough manufacturers join in, the group could work on recycling used batteries, reducing the cost of making batteries, which account for the bulk of production costs associated with electric vehicles.
Toyota has historically put more energy into developing and commercializing hydrogen fuel cell vehicles in Japan than electric cars, seeing the latter as expensive and plagued with problems including limited battery life and short range. Partnering with Panasonic, the world's top producer of automotive batteries, could help resolve many of these issues. The companies already collaborate on batteries for Toyota's gasoline-electric hybrids.
Foreign automakers including Germany's Volkswagen and Daimler and a host of Chinese companies, not to mention U.S. electric-car maker Tesla, are already investing heavily in electrics. Governments in China and Europe are putting their weight behind the technology as well.
And so Toyota is now playing catch-up. It agreed with Mazda in August to form a capital partnership including joint development of electric vehicles. A joint venture involving the duo and autoparts maker Denso was announced in September to develop core electric-vehicle technologies.
In November, Toyota said it would purchase and sell under its own name part of the electric vehicles that Suzuki Motor will build in India from around 2020. The automaker is also looking into producing electric cars developed by two Chinese peers at joint ventures in China.