Toyota to develop hydrogen fuel cars with Chinese partners FAW, GAC

BEIJING (Reuters) - Toyota Motor plans to launch hydrogen fuel-cell car models with its China partners Guangzhou Automobile Group (GAC) and FAW Group [SASACJ.UL], as the Japanese automaker tries to boost its presence in the world’s biggest auto market.

FILE PHOTO: A Toyota Mirai fuel cell vehicle awaits final inspection at a Toyota Motor Corp. factory in Toyota in Aichi Prefecture, Japan, April 11, 2019. REUTERS/Joe White/File Photo

Toyota will also equip GAC and their joint venture’s car models with fuel cells, according to a filing by GAC to the Shanghai stock exchange on Thursday.

The companies did not disclose financial details of the projects which deepen cooperation among the partners to develop new energy vehicle and connectivity technologies.

Fuel-cell cars use a stack of cells that electro-chemically combine hydrogen with oxygen to generate electricity to propel the vehicle, with water being the only byproduct.

Toyota will also expand cooperation on hybrid vehicles and aim to launch more battery electric vehicles with “good quality and low prices” separately with FAW and GAC.

Sources told Reuters last year Toyota planned to sell electric vehicles with GAC’s logo in their joint venture’s dealerships, in a move to meet China’s strict green car quotas.

The new development plan reflects gestures of goodwill to Beijing by Toyota, whose Chief Executive Akio Toyoda wants to “step on the accelerator in China”, while needing “to strike a fine balance between China and the United States”, according to minutes of internal meetings seen by Reuters.

Toyota sold around 1.5 million cars in China in 2018, far below its global rival General Motors and Volkswagen's VOWG_p.DE China sales. However, it is laying the foundation to increase sales in China to two million vehicles per year, Reuters reported last year.

Toyota in April said it had started supplying fuel-cell parts to Chinese commercial vehicle makers Beiqi Foton Motor Co Ltd and Beijing SinoHytec Co Ltd. In July it said it would supply key hydrogen fuel-cell parts to Chinese automakers FAW and Higer Bus.

Toyota will also share resources and talent to develop “intelligent connected” vehicles with GAC and FAW.

Reporting by Yilei Sun and Norihiko Shirouzu; Editing by Emelia Sithole-Matarise