BEIJING -- Toyota is planning to launch an all-electric sedan in China late next year, having turned to local partner BYD for key technology to finally make an affordable yet roomy vehicle, four sources told Reuters.
Two of the four people with knowledge of the matter described the car as an electric holy grail for Toyota, which has struggled for years to come up with a small EV that is both competitive on cost in China and doesn't compromise on comfort.
The sources said the breakthrough was chiefly down to BYD's less bulky lithium-iron-phosphate Blade batteries and its lower-cost engineering know-how -- a turning of the tables for a Chinese company whose popular F3 sedan was inspired by Toyota's Corolla back in 2005.
Little known outside China at the time, BYD, or "Build Your Dreams," hit the headlines in 2008 when Warren Buffett bought a 10 percent stake and it has since become one of the biggest manufacturers of so-called new energy vehicles in the world.
Toyota's new EV will be slightly bigger than its compact Corolla, the world's best-selling car of all time. One source said think of it as "a Corolla with bigger back-seat section."
It will be unveiled as a concept car at the Beijing auto show in April and will then most likely be launched as the second model in Toyota's new bZ series of EVs, even though it will only be on sale in China for now.
"The car was enabled by BYD battery technology," one of the sources told Reuters. "It has more or less helped us resolve challenges we had faced in coming up with an affordable small electric sedan with a roomy interior."
It will be pitched below premium EVs such as Tesla's Model Y or the Nio ES6 but above the ultra-cheap Hong Guang Mini EV, which starts at just $4,500 and is now China's best-selling electric vehicle.
Two of the four sources, all of whom declined to be named because they are not authorized to speak to the media, said the new Toyota would be priced competitively.
One said it would likely sell for under 200,000 yuan ($30,000), aiming for a segment of the Chinese market Tesla is expected to target with a small car within the next two years.
"We don't comment on future products," a Toyota spokesperson said. "Toyota considers battery electric vehicles as one path to help us get to carbon neutrality and is engaged in the development of all types of electrified vehicle solutions."
A BYD spokesperson declined to comment.