Picture: REUTERS
Picture: REUTERS

Tokyo — Toyota and Subaru say they plan to jointly develop a battery-electric sport-utility vehicle (SUV) on a platform produced together as they seek to split the cost of producing the lower-emissions car.

The pair will apply Subaru’s all-wheel-drive technologies and Toyota’s vehicle electrification technologies to the new SUV, which each will sell under its own brands, the carmakers said on Thursday. 

The move to share technology underlines the conundrum facing Toyota and other global carmakers, which are competing to develop new vehicle technologies including all-battery electric cars and self-driving cars, which require massive investment.

“Subaru and Toyota believe that it is necessary to pursue a business model that goes beyond convention, crossing over industrial boundaries,” the carmakers said.

Toyota is looking to partnerships with rival carmakers and tech firms to reduce its capital outlay for developing these new technologies. In April, it announced it would supply other carmakers with its hybrid technology, an area it has led since it pioneered the Prius in 1997.

While the Japanese carmaker has led in technologies for hybrid and fuel-cell vehicles, it has trailed behind rivals such as Nissan, Volkswagen and Tesla in bringing fully electric vehicles to showrooms.

As the smallest of Japan’s major carmakers, Subaru is struggling to independently invest in and develop lower-emission vehicles and on-demand transportation services widely seen as necessary to survive technological upheaval in the global vehicle industry.

It is also struggling with a spate of recent production- and quality-related issues, the side effects of rapid growth to keep up with booming for its Legacy sedans and Forester SUV crossovers in the US, its biggest market.

Thursday’s announcement builds on a partnership between Toyota and Subaru which goes back to 2005. Toyota is the largest shareholder in Subaru with a stake of 16.77%, according to Refinitiv data.