BMW and Toyota to Jointly Research Lithium Ion Batteries

BMW Group and Toyota Motor Corporation (TMC) announced today a memorandum of understanding (MOU) where the companies will research together the next-generation lithium-ion battery technologies. Current production Toyota hybrids use nickel metal hydride batteries, an older but thoroughly proven technology. Nevertheless, Toyota is about to introduce its first generation of Lithium ion batteries in the Prius Plug-in hybrid next year, as the U.S. National Highway Traffic Safety Administration investigates their potential to create vehicle fires. (See GM Will Lend Cars to Concerned Chevrolet Volt Owners as NHTSA Volt Battery Fire Investigation Continues)

The BMW Toyota collaboration is the latest example of automakers trying to decrease the astronomical cost of developing more efficient vehicles mandated by increasingly stringent fuel economy or CO2 regulations.

In addition, Toyota Motor Europe (TME), TMC’s European subsidiary, will buy from BMW 1.6- liter and 2-liter diesel engines.  The diesel engines will be installed in unspecified Toyota-produced vehicles planned for sale in the European market starting on 2014.

Since Toyota does not produce Lexus luxury models in Europe, no direct marketing conflict is apparent. The rising value of the Yen has forced a reluctant Toyota to increase production and sourcing of components outside of its home market in Japan where it is a major contributor to Japanese economic and social well being as the biggest automaker. 

“Of course we will remain competitors, but the collaboration has been excellent so far and will deliver what the partners and the market expect,” said Didier Leroy, President and CEO of Toyota Motor Europe when the diesel engine project was announced.

Because of European economic policies, diesel cars have an advantage in Europe that they do not have in the United States where diesel fuel is at a premium compared to gasoline. That restriction doesn’t apply to hybrids and EVs or electric vehicles both of which either use or will use lithium ion batteries in the future.

Toyota is the global leader in hybrid sales, a growing segment the German companies once renowned for engineering leadership completely missed. As a result, with arguably the exception of Honda, which also had an early hybrid program with its Insight, all companies have been playing catch up to Toyota’s impressive green image that resulted from the overwhelming success of the Prius hybrid with more than 3.4 million Prius and other Toyota and Lexus hybrids sold since the Prius went on sale in 1997.

BMW recently cancelled the sale of its $90,000 X6 active hybrid in the U.S. due to lack of customer interest. However, an all-electric BMW Mini Active E is about to become available in some U.S. markets. A two-year lease will be $499 a month with a $2,250 down payment. A series production BMW I3 EV follows in 2013.

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About Kenneth Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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