Toyota and Panasonic have announced a joint venture to manufacture prismatic electric vehicle (EV) batteries. The partnership will be established by the end of 2020, with Toyota owning 51% stake and Panasonic 49%.

Toyota will transfer equipment and personnel to areas of development and production, and Panasonic will move five battery production facilities to plants in Japan and China. The total number of employees involved in the venture will be 3,500.

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The joint venture is aimed at producing automotive prismatic lithium-ion, solid-state, and next-generation batteries. By the early 2020s, the companies hope to produce batteries with 50 times the capacity of those currently in use.

The batteries will be supplied to Mazda and Toyota subsidiaries Daihatsu Motor and Subaru. The companies hope the joint venture will persuade Honda, which uses Panasonic batteries in its hybrid vehicles, to also take the new batteries.

The venture is part of Toyota’s plans to expand in the EV market. According to Asian Nikkei Review, Toyota is an industry leader in fuel efficiency but is behind Volkswagen and Chinese EV companies on selling cars due to high battery costs. By partnering with Panasonic, Toyota hope to save on investment costs and triple annual sales of electric cars to 5.5 million by 2030.

Toyota executive vice president Shigeki Terashi said: “Together with Panasonic, we want to hone our competitiveness in batteries, which represent one of the core technologies of electrified vehicles. By contributing to the popularisation of Toyota’s and other automakers’ electrified vehicles, we want to help find solutions to issues such as global warming, environment-related challenges, and energy-related challenges.

“We have high expectations for the new company, including―as we aim to deliver ever-better electrified vehicles to even more customers―its role in fulfilling our plans for the popularisation of electrified vehicles.”

Panasonic senior managing executive officer Masahisa Shibata added: “Uniting with Toyota’s battery and production-engineering technologies provides us an excellent opportunity for being able to evolve our automotive prismatic batteries, which have an established track record of performance and safety, faster than ever. Through the electrification of vehicles, we want to accelerate our contribution to the realisation of a society of mobility that is kind to the environment.”