BMW, Toyota in Partnership

(Source: The Wall Street Journal)

TOKYO—Toyota Motor Corp. and BMW AG said Thursday they have forged a partnership in which the two will conduct joint battery research for next-generation green cars and BMW will supply diesel engines to Toyota.

"We think that this collaboration will allow for development of next-generation batteries to be done faster and to a higher level," Takeshi Uchiyamada said at a press conference in Tokyo. In addition to the research on lithium-ion batteries, the two car makers will discuss other possible environmental-technology projects.

The deal will also reduce BMW's engine-production costs per unit by increasing volume. Though a market leader in the premium segment, BMW lacks the economies of scale of mass-market auto makers like Volkswagen AG or General Motors Co., so teaming up with a player of Toyota's scale makes sense. 

This is the first engine procurement from a competitor for Toyota, which boasts of its power-train range, from combustion engines to hybrid and fuel-cell systems. In an earlier collaboration, Toyota supplied BMW with a 1.6-liter diesel engine for its Mini between 2002 and 2005.

That could also be very helpful for the electric car production! One of the major problems with electric cars are the short life expectations of the batteries as well as the charging times. I am curious how this partnership will continue...