TOKYO -- Toyota and Subaru will jointly develop a platform for full-electric midsize and large passenger vehicles and also collaborate on a battery-powered compact SUV.
The SUV will be sold under each company's brand, the automakers said in a statement on Thursday.
The companies will apply Subaru's all-wheel-drive technologies and Toyota's vehicle electrification technologies, they said.
The announcement builds on a partnership between Toyota and Subaru which goes back to 2005. Toyota is the largest shareholder in Subaru with a stake of 16.77 percent, Refinitiv data showed.
The move to share technology underlines the conundrum facing Toyota and other global automakers, which are competing to develop new vehicle technologies including all-battery electric cars and self-driving cars, which require massive investment.
"Subaru and Toyota believe that it is necessary to pursue a business model that goes beyond convention, crossing over industrial boundaries," the automakers said.
Toyota is looking to partnerships with rival automakers and tech firms to reduce its capital outlay for developing these new technologies. In April, it announced it would supply other automakers with its hybrid technology, an area it has led since it pioneered the Prius in 1997.
While the Japanese automaker has led in technologies for hybrid and fuel cell vehicles, it has trailed behind rivals such as Nissan, Volkswagen and Tesla in bringing fully electric vehicles to showrooms.
As the smallest of Japan's major automakers, Subaru is struggling to independently invest in and develop lower-emission vehicles and on-demand transportation services widely seen as necessary to survive technological upheaval in the global auto industry.
It is also struggling with a spate of recent production- and quality-related issues, the side effects of rapid growth to keep up with booming for its Legacy sedans and Forester SUV crossovers in the United States, its biggest market.