Toyota/BMW Partnership: Diesel Engines Earlier, Batteries Later
Last December, Toyota and BMW announced “a long-term technological partnership.” Ostensibly, it was about developing batteries together, and about BMW supplying diesel engines, in that order. Four months later, the priorities seem to have changed a little.
In a joint press release, Toyota and BMW announce that they just now have signed an agreement on collaborative research for lithium-ion battery cells. Research has started, and this being research, it can take a while.
The diesel engines will come earlier, and in earnest. Toyota has contracted BMW as the supplier of highly efficient 1.6 liter and 2.0 liter diesel engines, and BMW will start shipping in 2014. Toyota has realized that diesel is a big seller especially in Europe, where it holds 50 percent market share. Diesel is making inroads in India. Even in Japan, diesel cars are beginning to appeal to customers. Toyota has its hands full with hybrids and other new generation technologies and does not have the bandwidth to tinker with its own diesel engines.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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I'm guessing this means that Primearth EV Energy Co (Toyota and Panasonic's battery JV) will supply batteries to BMW. Meaning, that Panasonic-Sanyo's dominant position in hybrid and EV batteries will be extended. They already supply batteries to the Prius, Insight, Civic Hybrid, Tesla Roadster/S, several GM two-modes (along with Hitachi), VW Tourag Hybrid, as well as the Ford hybrids. BMW, may be having second thoughts of its tie-up with A123 Systems after the very public reliability and recall issues that its had been Fisker. BMW having their i3 or i8 die in the hands of Consumer Reports would have a massively negative impact, not just on their EV lineup, but the image of entire brand.
There was also an article on Autoweek a year ago, saying that Toyota wants to turbocharge its engine lineup. Maybe this alliance is a way to achieve that.
BMW already has an alliance for electric cars with PSA called BPC Electrification http://www.bpc-electrification.com/en/index.html
This seems to be good business for both parties to me. Toyota gets the diesels they need, which are considered in their technologies "menu" as the rest of the OEMs and BMW gets some $$$ to improve their ROI in the R&D of those engines. Toyotas and BMW are sold to very different customers. I bet the typical Toyota customer is not interested in having "The Ultimate Driving Machine", and the same goes for the BMW ones in having a rolling appliance.