Ford and Toyota will work together on a hybrid drivetrain for pickup trucks and SUVs, allowing them to more quickly and affordably create technology that meets strict new fuel economy standards.
The two companies signed a memorandum of understanding today agreeing to build a hybrid drivetrain we’ll see in Ford and Toyota trucks by the end of the decade, when full-size trucks and SUVs must begin significantly increasing their fuel efficiency.
“This agreement brings together the capability of two global leaders in hybrid vehicles and hybrid technology to develop a better solution more quickly and affordably for our customers,” Derrick Kuzak, Ford vice president of global product development, said in a statement.
The partnership comes as federal regulators finalize plans to increase corporate average fuel economy standards to 54.5 mpg by the 2025 model year. That’s twice the current requirement, an increase automakers will meet only by building smaller, lighter cars and embracing battery electric and gas-electric drivetrains.
The collaboration makes sense for both companies.
Ford and Toyota already make excellent hybrids and no doubt were developing the technology for full-size trucks. Working together makes the job easier for Ford and cheaper for Toyota, said Aaron Bragman, an auto industry analyst with IHS Automotive.
Ford can get a look at what Toyota, by far the leader in hybrid tech, is working on, thereby saving time and money. Toyota, which builds a fraction of the trucks Ford does, can tap Ford’s economy of scale to offer a cost-effective and affordable rear-wheel-drive hybrid system.
“This is a winning situation for both companies,” Bragman said.
The Ford F-150 has long been the best-selling truck in the United States, and Toyota dominates the hybrid market. But neither company sells a full-size rear-wheel-drive hybrid truck, and the companies that have — most notably General Motors — saw little success.
That’s because current hybrid systems can add $10,000 or more to the sticker price while returning a negligible increase in fuel economy. But meeting the new fuel economy standards will force automakers to embrace advanced technologies and offer them widely, prompting Ford and Toyota to work together. (General Motors reportedly is working on a successor to the two-mode hybrid system it offered in vehicles like the Cadillac Escalade Hybrid.)
The proposed fuel economy standards will require automaker’s corporate fleets to average 54.5 mpg by 2025. Full-sized pickups are exempt from increases during the 2017-2019 model years, but will see annual increases reaching as much as 5 percent annually thereafter.
“The EPA fuel standards are a big challenge for us automakers,” Takeshi Uchiyamada, Toyota’s executive vice president for research and development, said through a translator at a press conference in Detroit. “Trucks and SUVs are vehicles that the American society cannot do without. This collaboration we are forming with Ford is not only about lowering carbon dioxide but making light-duty trucks and SUVs more affordable.”
The two companies will not develop trucks and SUVs, only the hybrid drivetrain propelling them. The technology will appear in unspecified Ford and Toyota models, and the companies said the drivetrain will be tailored to suit each vehicle and the needs of consumers.
“Clearly Ford and Toyota will remain competitors,” Kuzak said during the press conference. “By working together, we will be able to offer our customers more affordable technology sooner.”
The next step is drawing up a formal agreement, which is expected next year, and a feasibility study to determine the extent of the collaboration. The companies also will work together to develop standards for vehicle telematics and in-car internet services.
This is not the first time Ford and Toyota have worked together. The two companies signed a patent-sharing deal in 2005 that allowed Ford to license Toyota’s Synergy Hybrid system for the Ford Escape and Mercury Mariner hybrids. In exchange, Toyota gained access to Ford’s diesel and direct-injection engine technology.
But this is the first time the two automakers have worked together on product development. They started exploring the possibility of a partnership when Ford boss Alan Mulally and Toyota boss Akio Toyoda crossed paths at an airport, Uchiyamada said. Drivetrain development teams from the two automakers started working together in April.
“This is the kind of collaborative effort that is required to address the big global challenges of energy independence and environmental sustainability,” Mulally said in a statement.