Today in a jointly held press conference in Tokyo, BMW and Toyota announced a Memorandum of Understanding leading towards a partnership in which the two companies will work together on battery technology, and where BMW will supply Toyota with clean diesel engines for vehicles Toyota will sell in Europe. While BMW has partnered with Japanese parts suppliers in the past, this agreement marks their first joint partnership with a Japanese automaker.
Clean Diesel: BMW is a leader in clean diesel technology using turbo-charged diesel engines. They burn cleaner, use less fuel, and produce more horsepower than earlier generations of diesel engines. While diesel is not popular in the U.S. it is very popular in Europe, and Toyota sees this as an important move for their European sales. This part of the agreement is expected to begin with Toyota's 2014 model year, and they did not name which models would have a diesel option. They suggested that Toyota start with a diesel version of a car they currently produce in Europe.
They did make it clear the agreement does not include Toyota developing a clean diesel hybrid vehicle using these engines. Toyota pointed out that today they produce a 1.2 liter diesel engine, and that they sell a hybrid diesel light truck in Japan. The agreement covers 1.6 and 2.0 liter clean diesel engines, technology which Toyota currently does not have in their own product line-up.
Battery technology: Both companies talked about recognizing the need to accelerate electric vehicle technology. Toyota talked strongly about the need to reduce or eliminate fossil fuel use, as well as the ever-tightening emissions regulations around the world. Electrification is the way forward for clean individual mobility.
"Whoever has the best batteries in terms of function, cost and quality will win more customers" said Dr Klaus Draeger, BMW Board member. Both companies want to "set benchmarks" in both hybrid and electric vehicles.
Both companies have electric vehicles in research and in development. Both companies discussed a need to focus on developing next generation battery cells. They talked about research at the cell level in anodes, cathodes and electrolyte which, as the fundamental components of batteries, mean their research goal really is to develop battery cells. Reading between the lines one thinks they'll jointly develop cells, but individually develop battery pack systems (containment boxes, battery management, charging, and cooling).
In the Q&A Toyota's spokesperson said they have been developing their own battery systems of course, but that competition is tough, and that by working jointly with BMW they can make many achievements in a short time. Again, reading between the lines, this makes one think that Toyota sees themselves as being behind the curve on developing lithium-ion battery systems because they've spent so long developing nickel-metal-hydride systems for their hybrid vehicles.
An agreement on EV technology between Toyota and BMW is curious considering Toyota's existing partnership with Tesla Motors. Tesla has seen investment from both Daimler and Toyota, both of whom appoint one member each on Tesla's Board. Further Tesla and Toyota are working together in developing the RAV4-EV. The Toyota and Tesla agreement is, however, over electric vehicles and parts, not battery cells.
Joint investment: Answering another Q&A question the Toyota spokesperson said BMW and Toyota are not, at this time, considering joint investment in each others stock.
Norbert Reithofer, Chairman of the Board of Management of BMW AG, said: “Toyota is the leading provider of environment-friendly series technology in the volume segment and the BMW Group is the most innovative and sustainable manufacturer of premium automobiles. We are now joining forces to further develop environment-friendly technologies and to expand our innovation leadership in each of our segments. Supplying Toyota with our fuel efficient and dynamic diesel engines represents another important step in the planned expansion of our sales activities for engines and powertrain systems.”
TMC President Akio Toyoda said: “It is a great joy and a thrill to enter into this mid-to-long-term collaborative relationship with BMW, a company with its own culture and history from its many years of car manufacturing in Europe, and a company that makes cars that are fun to drive. In the spirit of contributing to furthering the development of the auto industry and society, both companies will bring their wide-ranging knowledge - starting with that concerning environmental technologies - to the table and make ever-better cars.”
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