Car Industry

Mazda, Toyota team up to develop electric, connected cars

The two companies' collaboration will span multiple continents and several segments of the auto industry. It's a big one.

Tomohiro Ohsumi / Getty Images

After two years of negotiation, Toyota and Mazda officially announced Friday a partnership that will help both Japanese companies work toward the future of the automobile.

Perhaps the biggest part of the announcement is the establishment of a joint venture in the US for vehicle production. The two will build a $1.6 billion plant in the US -- they didn't say where exactly -- that will create up to 4,000 jobs and should be online in 2021. Its production capacity is expected to be about 300,000 vehicles per year.

At this plant, Mazda will build new crossover models that it will introduce to the US market. Toyota will use the plant to build the Corolla, as well. This will reinforce Toyota's commitment to building cars in the US, while it will give Mazda the North American foothold it needs to expand its stateside market share. Ideally.

One big happy family.

Tomohiro Ohsumi/Getty Images

That's only the start of the partnership, though. Mazda and Toyota will also work together on electric vehicle development. This part of the collaboration is light on specifics, but the two companies want to develop "technologies for the basic structure of competitive electric vehicles," which probably refers to a singular EV platform off which both companies can build electric cars.

But, in the words of famous TV hucksters, that's not all! The two automakers will also co-develop the next generation of infotainment systems with a focus on connectivity, specifically vehicle-to-vehicle and vehicle-to-infrastructure communication, which Toyota has already started developing. The goal here is to create a "mobile society devoid of accidents," which is a lofty goal indeed.

Finally, Toyota will finally supply a vehicle to Mazda. Currently, Mazda already lends its Mazda2 sedan to Toyota, which is marketed as the Toyota Yaris iA (née Scion iA) in the US.

The partnership also involves each automaker owning a chunk of the other. Toyota will take a 5 percent share of Mazda, while Mazda will take a 0.25 percent share of Toyota. This is considered an equal exchange, which goes to show just how much larger Toyota is.

Everything this partnership touches on is something that's considered vital over the next decade in the automotive industry. By tying their fates together, Toyota and Mazda hope that collaboration will reduce costs enough to where this future is not only feasible, but decently affordable.