The two automakers will invest 50-50 in a new company—BYD Toyota EV Technology Co. Ltd—with operations scheduled to start in May.
For now, the partnership is for China only. But it could potentially lead to technology agreements that reach out to other regions.
BYD joins numerous other Toyota EV partners, including battery makers Panasonic and CATL.
One aspect of the Panasonic partnership has been tests of the Japanese firm’s cylindrical battery cells in Chinese-market Toyota plug-in hybrids.
The new joint venture could lead to more of this kind of exploration between Toyota and BYD, although BYD did just launch its own new battery pack for electric cars.
Toyota’s partnership with Panasonic also includes investigations into solid-state battery tech, which Toyota views as a prerequisite to mass EV adoption. Proponents of solid-state battery cells claim they can deliver greater energy density than current lithium-ion cells, allowing for greater range without a physically larger battery pack.
If Toyota and Panasonic can get solid-state batteries into mass production, they could be used in electric cars for many different markets.