Toyota and China’s BYD announced today that they have signed an agreement to establish a joint company for the research and development of electric vehicles. This comes after both parties agreed to jointly develop EVs in July.

The new R&D company, which will work on designing and developing EVs (including platform) and its related parts, is expected to be established in China in 2020, with the Chinese EV expert and Toyota to evenly share out the capital outlay. BYD and Toyota also plan to staff the new JV by transferring engineers and jobs currently involved in related R&D from their respective companies.

“We aim to combine BYD’s strengths in development and competitiveness in the battery electric vehicle market with Toyota’s quality and safety technology to provide the best EV products for the market demand and consumer affection as early as we can,” said BYD senior VP Lian Yu-bo.

“With the same goal to further promote the widespread use of electrified vehicles, we appreciate that BYD and Toyota can become ‘teammates’, able to put aside our rivalry and collaborate. We hope to further advance and expand both BYD and Toyota from the efforts of the new company with BYD,” Toyota executive VP Shigeki Terashi commented.

Founded in 1995 as a battery business, BYD (Build Your Dreams) has grown into a total energy solution company, manufacturing not only electrified vehicles but other products such as large energy storage cells. Core parts for electrified vehicles such as batteries, motors and power electronics are among the products that BYD develops in-house. In 2008, BYD became the first in the world to sell mass produced plug-in hybrids, and since 2015, BYD is the top seller of EVs and PHEVs in the world.

When it comes to electrification, Toyota is a pioneer in hybrid cars. The Japanese giant has sold over 14 million electrified cars worldwide since the first Prius debut in 1997. In addition to this JV with BYD, Toyota has an R&D centre in China (TMEC) and two regular JV companies with local partners FAW and GAC.