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Ford and Toyota team on hybrids for trucks, SUVs

The two automakers will develop a shared hybrid architecture for rear-wheel-drive vehicles to broaden the use of hybrid technology for fuel economy.

Auto giants Ford and Toyota plan to jointly develop a hybrid powertrain for light trucks and SUVs, in a move designed to bring hybrid technology to a wider set of vehicles.

The two companies announced the agreement today, calling it a collaboration of "equal partners" that will yield a new hybrid architecture for rear-wheel-drive vehicles later in the decade. Both companies will integrate the hybrid system into their own trucks and SUVs.

Toyota and Ford will also work together on in-car telematics, although this will focus on standards and technologies for safety and communications. They will both continue to develop telematics products separately.

The two companies, both considered leaders in fuel economy, signed the agreement to accelerate the adoption of hybrid powertrains in SUVs and light trucks and share development costs. "This is the kind of collaborative effort that is required to address the big global challenges of energy independence and environmental sustainability," Ford CEO Alan Mulally said in a statement.

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Hybrid powertrains, which use both a battery-powered electric motor and a gas engine to move a vehicle, are one of the technologies automakers are expected to use to meet new fuel economy standards. Automakers are also expected to make efficiency improvements to internal combustion engines and use start-stop technology, in which a small battery powers a car when it is idle.

Derrick Kuzak, Ford group vice president of global product development, told the Associated Press that it will take two or three years before the hybrid system can be developed.

Toyota introduced its first-generation hybrid Prius in 1997 and has now sold 3.3 million hybrids. Ford's hybrid Escape SUV, released seven years ago, was the company's first foray into hybrids, which was followed by the front-wheel-drive hybrid system on the successful Ford Fusion sedan.

The announcement today is a memorandum of understanding between Ford and Toyota. A final agreement is expected next year, which will define how the two companies will work together, a Ford representative said.

The collaboration signals that automakers will need to use hybrid techology to meet the EPA fuel economy standards, said Oliver Hazimeh, the director of the automotive global eMobility practice at management consulting company PRTM.

"We need significant ICE (internal combustion engine) technology deployment at increasing cost and we also need to see increasing electrification of the powertrain. We don't believe that (corporate average fuel economy) standards will be achieved on ICE only," he said.

Updated at 8:25 a.m. with comment from Ford representative. Updated at 2:05 p.m with comment from PRTM.