Why Toyota and BMW FCEV Joint Venture Works

BMW and Toyota are poised to market commercially viable fuel-cell vehicles after announcing this week they intend to deepen their joint R&D efforts to develop hydrogen-based solutions for passenger cars.

Both companies have had ongoing hydrogen projects for more than a decade. BMW plans to launch its first production fuel cell electric vehicle (FCEV) in 2028, though it has been piloting hydrogen-powered cars since the late 1990s. Toyota has marketed the Mirai FCEV since 2014, though it has remained a low-volume vehicle sold only in certain states such as California. Toyota and BMW have also been exploring liquid hydrogen as an alternative fuel, especially in motorsports.

“We are pleased that the collaboration between BMW and Toyota has entered a new stage,” says Koji Sato, President and Member of the Board of Management (Representative Director), Toyota Motor Corp. “In our long history of partnership, we have confirmed that BMW and Toyota share the same passion for cars and belief in ‘technology openness’ and a ‘multi-pathway’ approach to carbon neutrality.”

The companies say the joint venture will focus on shared powertrain technology “utilized across individual models to offer attractive FCEV options.”

BMW’s motivation to advance hydrogen passenger cars stems from the push in the European Union to become far less dependent on Russian oil and natural gas, a steady and long-term goal given Russia’s belligerent geopolitical posture. Also, while Chinese automakers are making life difficult for legacy western automakers selling battery-electric and internal-combustion vehicles, FCEVs could be a profitable business for both BMW and Toyota on multiple continents as industrialized nations invest in hydrogen infrastructure and “green hydrogen” production and distribution from solar, wind and biomass sources.

Hydrogen-powered vehicles have been touted as a zero-emission propulsion panacea for more than 30 years, but efforts to scale the technology at an acceptable price has confounded automakers. However, the U.S., China and EU are keen to subsidize and facilitate an expansion of hydrogen power for both mobility and stationary power to replace fossil fuel, especially diesel.

Besides passenger cars, Toyota is applying its FCEV efforts to its Hino heavy truck unit as markets such as California have target dates to phase out diesel trucks altogether.

BMW’s forthcoming X5-based FCEV successor to the iX5, currently offered to preferred customers for limited leasing as part of a development program, due to launch in 2028, is the first in an extended lineup of BMW models to feature a new fuel-cell stack which Toyota also is to employ in a follow-up to the Mirai sedan also planned for launch in 2028.

The new stack, set to receive third-generation fuel cells offering greater efficiency and thermal stability than today’s unit, forms an integral part of a new hydrogen-electric drivetrain being developed by BMW and Toyota as part of plans that will see both companies begin offering FCEV models alongside more traditional ICE, PHEV and BEV models in the future.

The two companies also revealed plans that will allow each company to provide customers with a choice of individual FCEV options, indicating BMW and Toyota models are to receive differing power and performance parameters.

In BMW models, the new stack will operate in combination with elements of the German car maker’s upcoming sixth-generation electric drivetrain set to be unveiled in the company’s new Neue Klasse models, including an electric version of the next 3-Series and a successor model to the iX3. 

BMW says its first series production FCEV model will be integrated into its existing portfolio, confirming it will “offer an existing model in an additional hydrogen fuel-cell drive system variant.”

Oliver Zipse, Chairman of the Board of Management of BMW AG, says he believes the work the two companies are doing “will herald an era of significant demand for fuel cell electric vehicles.”

Making Partnerships Work

While mergers and JVs have historically been fraught with culture clashes (Ford’s ownership of Jaguar, Volvo and Land Rover; BMW’s ownership of Rover Group; General Motors and Honda that ended after one EV project), BMW and Toyota have a productive history of working together.
The companies have engaged in several JVs and collaborations over the years, focusing primarily on the development of new technologies and vehicle platforms.

Their FCEV partnership working on hydrogen technology began in 2011. The new expansion is significant for bringing actual passenger vehicles to the market. The two companies in 2013 began work on a fuel-cell system and platform the two companies could share.

The two automakers also developed a joint sports ICE car platform, which became the BMW Z4 (G29) and Toyota Supra (A90) and included a BMW turbocharged inline 6-cyl. engine.

The two companies have also jointly developed lithium-air battery technology, which has the potential for higher energy density compared to traditional lithium-ion batteries in BEVs. They have also shared development of lightweight materials, such as carbon fiber and composites, that are critical for improving vehicle efficiency and performance. Both companies have since incorporated lightweight materials into their respective vehicle lineups.

Toyota Chairman Akio Toyoda has long been an admirer of BMW’s engineering culture and racing history and has fostered projects even as CEOs at BMW changed.

“BMW and Toyota are both leaders in their respective fields, and I believe that by working together, we can accomplish more than we could alone,” Toyoda said when the original partnership was created. “This collaboration is not just about developing new technologies but also about combining the strengths of two companies with different cultures and traditions to create something truly special."

Now that FCEV technology is on the cusp of being monetized and scaled, two of the most productive engineering cultures among global automakers, each known for taking a long view of the industry, are ahead of its competitors in doing just that.

Correspondent Greg Kable contributed to this report.