The joint R&D activities will initially focus on basic research for next-generation lithium-ion batteries. Batteries are one of the core elements of future hybrid and electric vehicles and will play a decisive role in the carmakers' branding and differentiation strategy. Market researchers estimate the volume of the traction battery market to about 20 billion Euros in 2020.
Beyond the battery research, the carmakers agreed to evaluate further collaboration projects aiming at better overall fuel efficiency.
The agreement to provide BMW diesel engines to Toyota includes sales of 1.6 liter and 2.0 liter engines. Experts believe that BMW hopes to gain insight into Toyota's market leading hybrid technology. So far however, Toyota only offers gasoline engines for hybrid vehicles. At present, is unclear if the deal can be regarded as a hint that TME plans to offer Diesel-based HEVs.