Toyota has agreed to sell its electric car technology to Chinese startup Singulato, in a move which will give it preferential rights to buy green credits under China’s new quota system for electric vehicles (EVs).
The green car credit system, introduced in January, requires a significant portion of car makers’ production or imports in China must be electric or hybrid.
Those that do not meet the quota themselves can purchase credits from rivals that exceed it, but if they do not have enough credits they face government fines for their operations in China.
Singulato is developing a mini EV which it hopes to release later this year. This will generate credits for the startup, some of which Toyota will then purchase. Toyota has already said that initially it won’t be able to meet its quotas without buying credits from others.
The startup will get a license to use the design of Toyota’s eQ, a battery-powered mini EV.
Toyota also hopes to get a bird’s-eye view into how Chinese EV startups work, sources told Reuters.
“With electrification, autonomous driving and car-sharing shaking up the industry, old ways need to be re-examined,” one of the sources said.
“We have a century’s lead in automotive technology, but we also need to be humble enough to learn from newcomers,” they added.