Toyota and Mazda to team up on electric cars, open joint $1.6bn US plant

Toyota and Mazda have agreed to jointly establish a $1.6bn assembly plant in the US as well as collaborate on new technologies for electric vehicles.

The announcement comes at a time of waning car sales in the US, but could also represent something of a win for president Donald Trump who has been keen to attract and keep manufacturing State-side as part of his plans to boost the domestic economy.

Earlier in the year, Mr Trump threatened Toyota with a heavy import fee if it moved production of Corollas for the US market to Mexico.

The location of the new plant is not known, but the two companies expect it to create up to 4,000 jobs and have annual production capacity of 300,000 units. Toyota already has a number of plants in Indiana, Kentucky, Mississippi and Texas.

To help address the growing market worldwide for electric vehicles, the companies said they would explore “joint development of technologies for the basic structure of competitive electric vehicles”, that should allow them to “respond quickly to regulations and market trends in each country.”

The pair also said they would jointly develop connected car and safety technologies.
As per the terms of the capital and business partnership Toyota will take a 5.05 per cent equity stake in its peer, while Mazda will take acquire Toyota shares with an equivalent value to its partner’s stake.

The deal represents a major step since the pair first signed a memorandum of understanding in 2015 to explore various areas of collaboration.

Earlier in the afternoon, Toyota reported better-than-expected earnings for the first quarter of its fiscal year.