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Japanese automakers Toyota Motor Corp. and Subaru Corp. are teaming up to develop a battery-electric SUV on a joint platform as both companies seek to split the cost of producing the lower-emissions car.

In this particular partnership, Subaru’s all-wheel drive technologies will be used alongside Toyota’s vehicle electrification technologies on a new SUV, which will both be offered under the two brands.

The plan was brought about by the problems faced by Toyota and other global carmakers all competing to develop new vehicle technologies including all-battery electric cars and self-driving cars.

“Subaru and Toyota believe that it is necessary to pursue a business model that goes beyond convention, crossing over industrial boundaries,” the companies said in a statement.

, Toyota, Subaru Collab on Battery-electric Platform
Subaru’s all-wheel drive technology will be used together with Toyota’s vehicle electrification technology on a new SUV.

Developing new technologies require a massive investment, and Toyota is looking to soften the blow in its pockets by partnering with other automakers and tech firms to reduce the capital outlay. In April, it was announced that the brand would supply other brands with its hybrid technology, which the company has led since it pioneered the Prius in 1997.

But while Toyota has led in hybrid and fuel cell technologies, it failed to keep up with rival brands such as Nissan Motor Co Ltd, Volkswagen AG, and Tesla Inc. in developing fully electric vehicles.

Subaru, meanwhile, is struggling when it comes to investing in and developing lower-emission vehicles and on-demand transportation services independently, being the smallest major Japanese automaker in the market.

It is also having problems with a series of recent production- and quality-related issues, which comes as a side effect of the brand’s efforts for rapid growth in order to bolster its Legacy sedan and Forester SUV production in the United States—the company’s biggest market.

With the partnership, Toyota and Subaru revisit their old partnership that dates back to 2005. Toyota is the largest shareholder in Subaru with a stake of 16.77%, according to Refinitiv data.

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