Toyota Motor Corp <7203.T> and BMW AG will jointly research a lithium-air battery expected to be more powerful than the lithium-ion batteries used in many hybrid and electric vehicles, the two firms said.
The two companies will also work on a fuel cell vehicle system, which includes a hydrogen tank and motor, by 2020, they said on Thursday.
The strengthening of the partnership between Toyota, the world's best-selling automaker, and BMW, the largest premium carmaker, will allow them to cut development costs as competition intensifies globally.
"In order for FCVs (fuel cell vehicles) to become more widely used, it needs to be cheaper. That would require a great deal of time and cost for development," said Toyota Vice Chairman Takeshi Uchiyamada, who led development of the bestselling Prius hybrid in the late 1990s.
"By bringing together the wisdom of two companies, we can aim to make FCVs more popular much quicker," he told a news conference with BMW at Nagoya, central Japan.
Toyota said it wanted to introduce a new fuel cell vehicle around 2020 using the jointly developed technology, while BMW said a launch date had not been decided. Toyota aims to start selling a fuel cell sedan by around 2015.
The two companies reiterated that they had no plans for a capital tie-up.
Toyota uses lithium-ion batteries in its Prius plug-in hybrid, some Prius v, and the eQ electric car.
A lithium-air battery has its anode filled with lithium, and cathode with air. Theoretically, the battery can generate and store more electricity than the existing lithium-ion battery.
The technology is being studied by researchers including IBM , which is working to develop a lithium-air battery that will let electric vehicles run 500 miles on one charge.
Toyota and BMW also said they would work on a shared platform and technology for a mid-sized sports car, and develop technologies to make cars lighter and thus more fuel-efficient.
Eager to strengthen its diesel engine line-up in a sagging European market, Toyota agreed in 2011 to collaborate with BMW on lithium-ion battery research in exchange for a steady supply of BMW-made diesel engines starting in 2014.
BMW, which needs to cut carbon emissions of its new car fleet by roughly a third by 2020, agreed with Toyota in 2012 to work on fuel cells and electrified powertrains too.
Toyota's Uchiyamada said they wanted to decide as soon as possible on how to collaborate on the electrified powertrains.
(Reporting by Yoko Kubota; Editing by Daniel Magnowski and Helen Massy-Beresford)