Mazda and Toyota Are Doubling Down on Their Electric Car Partnership

A new agreement brings automotive supplier Denso into the mix.

Toyota

Toyota, Mazda, and supplier Denso have signed a contract to jointly develop "basic structural technologies" for electric cars, according to a press release from the companies. The contract strengthens the relationship between Toyota and Mazda and may help both companies compete in what is becoming an automotive electrification arms race.

The automakers previously agreed to work together on electric car tech, including a joint $1.6 billion investment in a U.S. factory. The contract signed Thursday outlines more details of that relationship. Electric cars will be necessary to meet stricter future emissions standards, Toyota and Mazda believe, but development costs will be high—hence the partnership.

"Toyota, Mazda, and Denso will work together to develop a basic electric car component set that can be applied to a wide variety of models, ranging from mini vehicles to passenger vehicles, SUVs, and light trucks," the press release said. The companies will seek to share development resources and production facilities in order to keep costs down, but will try not to dilute their individual brand identities.

Both automakers are relative latecomers to electric cars. Each has dabbled in the technology before, but neither currently offers a mass-market electric car. As one of the smallest mainstream automakers, Mazda likely lacks the resources to develop electric vehicles on its own. Toyota, on the other hand, has thrown most of its weight behind hydrogen fuel-cell cars and hybrids like the Prius, only recently pivoting toward pure EVs.

But the Japanese duo may have to quickly ramp up their electric car efforts. Several European countries are considering outright bans on gasoline and diesel cars in the coming decades, and other automakers have ambitious electrification plans that will take great strides to match. The Volkswagen Group will offer a hybrid or all-electric version of every model it makes by 2030...and Tesla's plans to ramp up production of the Model 3 could well have quite a disruptive impact on mainstream automakers like Toyota and Mazda.