It will be a virtual organisation, made up of four people: one from each of Toyota Industries Corporation, Aisin Seiki Co. Ltd., Denso Corporation and TMC.
The body will be independent from other internal organisations and launched in December. The small make-up of the company is designed to help implement "unconventional work processes" to speed up progress on work and get products to market quicker.
The unit forms part of Toyota's efforts to accelerate efforts to produce more of the lower-emission cars.
The team will plot out a strategy for dealing with keeping electric cars in line with stricter global emissions regulations. The company has pledged to make all of its vehicles essentially emissions free by 2050.
TMC President Akio Toyoda, said: "Over these past few years, which we have positioned as years for strengthening our planting of seeds for the future, we have taken such measures as establishing the Toyota Research Institute, making Daihatsu a fully-owned subsidiary and beginning work to establish an internal company responsible for compact vehicles for emerging markets."
The new structure for EVs marks part of this effort and Toyoda hopes it will serve as a driving force in innovation for the company.
The company has been developing ultra-compact EVs for years, but has said it would like to have the option of expanding into developing full-size EVs.
Prior to this, the Japanese firm had been focused on pushing plug-in electric hybrid cars and hydrogen fuel-cell vehicles (FCVs) as the most promising alternative to conventional cars.
It's been a busy week for the electric car market. Jaguar unveiled its first electric car earlier this week: the I-PACE Concept. It accelerates to 60mph in four seconds with a range of more than 500km.
And BMW plans to ramp up sales of electric cars to 100,000 next year, which would involve boosting sales by two-thirds.