Batteries are at the core of the rise of electric vehicles and two big players are teaming up to capitalize on the demand.
Toyota and Panasonic are teaming up to create a joint venture for manufacturing EV batteries sometime in 2020. The collaboration would reduce the cost of power packs through the simple economy of scale.
The joint effort will reportedly supply both Toyota's Daihatsu brand as well as create powerpacks for brands like Mazda and Subaru.
According to sources, Honda might also be a potential customer as it makes the move towards EVs. If reports are correct Toyota would control a 51% stake in the venture and Panasonic will move five of its car battery production plants in China and Japan to the new company.
The new arrangement with Toyota won’t affect Panasonic's ongoing relationship with EV maker Tesla.
Big players team up to fulfill vision goals
The collaboration makes sense for both players. Toyota has dragged its feet towards electric vehicles investing more heavily in hybrids, but that is slowly starting to change. Getting access to a cheap and plentiful battery supply could allow them to leapfrog over any competitors.
For Panasonic teaming up with large manufacturers means they have a larger slice of the pie. Their deal with Tesla is already a huge plus and if they can be manufacturing power packs for more major brands, they will become a major influencer in the entire market.
Toyota has made it clear it wants to be a player, not only in the growing EV sector, but in the move towards a greener tech-driven world. At CES 2019, the Japanese company announced their plan to invest in technologies that will change society and define the future.
Speaking at Consumer Electronics Show (CES) 2019, Bob Carter, Executive Vice President – Sales at Toyota Motor North America, said that the company is transitioning from an automobile company to a mobility company, providing mobility for all.
Explaining this, he said, “Well, it’s about the freedom to move, whether it’s across the country, across town, or across the room. It’s about 'being of service,' with universal, inclusive, and accessible mobility solutions providing the greatest number of options to the greatest number of people. Because when you’re free to move, anything is possible.”
Toyota committed to a green future
Carter said that Toyota’s 2020 goal is to have more than 15 percent of U.S. sales as electrified vehicles and an electrified option for almost every new Toyota and Lexus model by 2025.
The 2030 goal is to sell approximately 5.5 million electrified vehicles per year, including one million zero-emission vehicles. The push into electric vehicles comes as part of the Toyota 2050 Environmental Challenge to have a near net positive impact on the environment by 2050.
The challenge includes six major goals, including the complete elimination of greenhouse gas emissions from our operations, and a 90 percent reduction from vehicles by 2050.
Toyota's collaboration with Panasonic is just one aspect of the company investing in battery technology and advanced fuel cell electric power systems.