Toyota May License Hybrid Tech to Chinese Carmakers

Toyota Motor Corp. is in advanced talks to license its hybrid-car technology to China’s Geely Automobile Holdings Ltd., sources tell Bloomberg News.

The Chinese government asked Toyota to share its know-how to help multiple domestic carmakers meet future emission targets, according to the sources. They say Toyota sees the request as a way to strengthen its position in China and boost sales there, where it trails market leaders General Motors and Volkswagen.

A Toyota spokesperson notes that Toyota has an open policy about working with partners but says no decision has been made about deals with Chinese carmakers. The company sold 1.3 million vehicles in China last year, about 10% of which were hybrids. Bloomberg says Toyota wants to more than triple that ratio by 2020.

Chinese government policy has been strongly focused on all-electric cars as a way to improve air quality. But Bloomberg says officials are beginning to consider hybrids as a faster interim solution. The news service also notes that trade tensions between China and the U.S. provide a new incentive for greater collaboration between China and Toyota.

A Toyota source says the company is contemplating license agreements with several Chinese manufacturers. Other sources tell Bloomberg that Toyota may offer complete powertrain packages through Chinese batterymaker Hunan Corun New Energy Co.

Corun is already working with Geely and has formed a venture with Toyota, Corun PEVE Automotive Battery Co., to supply Toyota factories in China with as many as 210,000 batteries per year by 2020.