Toyota is planning for the next generation by executing a unique business deal with Chinese electric vehicle startup Singulato. In return for giving Singulato use of its electric vehicle technology, Toyota will have preferential rights to purchase green-car credits that Singulato will generate under China’s new quota system for all-electric and plug-in hybrid vehicles.
Needing to combat smog and jump-start its own auto industry, China is aggressively pursuing the adoption of electric cars. Under a production quota system taking effect this year, automakers are required to produce and sell a certain number of new-energy vehicles in proportion to their overall sales volume. If a carmaker fails to achieve its quotas, it will have to acquire NEV points from an automaker with surplus credits or face penalties. This move will allow Toyota to rest easy for future Chinese vehicle production and give them an inside look at how one of China’s top electric vehicle companies operate.
This deal also gives Singulato a license to use the design of Toyota’s eQ, an electric microcar. They plan to redesign the vehicle, with goals of increasing range and lowering the price so it can be purchased by the masses. It will save Singulato years of R&D time, not to mention millions of dollars in cost associated with development.
Financial terms are not expected to be disclosed; however, a Singulato source said the startup agreed to pay “several tens of millions of dollars” for eQ’s design. The new car by Singulato based off the eQ will be called the iC3 and will feature some self-driving technology and get around 160-190 miles on a single full charge. I see this partnership as a win-win for both companies and look forward to seeing the results of this partnership.