Toyota to Form Joint Venture With Mazda for EV Technology

Advertisement

Per a Wall Street Journal report, Toyota Motor Corp (NYSE:TM) is going to start a new venture with Mazda Motor Corp (OTCMKTS:MZDAF) for the development of electric vehicles (“EV”). This move is in sync with the new strategy adopted by carmakers to increase focus on electrified vehicles.

Toyota to Form Joint Venture With Mazda for EV Technology

The venture, EV Common Architecture Spirit Co., is the latest alliance between Toyota and Mazda. While Toyota will hold 90% interest in the new venture, Mazda and Denso Corp, Toyota’s biggest supplier, will hold a 5% stake each.

The new venture will develop technology for different types of electric vehicles, including passenger cars, mini-vehicles, SUVs and light trucks. Toyota will provide most of the financial requirements and EV knowhow. Mazda, on the other hand, will support with its advanced technologies such as compression ignition engine.

Push for EVs has intensified in recent times. China, the largest market for EVs, intends to convert to EVs over the next two to three decades. Also, EV pioneer Tesla Inc (NASDAQ:TSLA) is moving at a rapid speed and creating immense pressure on conventional vehicles makers to devise plans for converting to EVs.

Over the past three months, shares of Toyota have slightly outperformed the industry it belongs to. Shares of the company have increased 12.8%, while the industry has gained 12.6%.

Toyota currently sports a Zacks Rank #1 (Strong Buy), while Tesla carries a Zacks Rank #3 (Hold).

Two stocks worth considering in the auto space are Allison Transmission Holdings Inc (NYSE:ALSN) and Volkswagen AG (OTCMKTS:VLKAY). While Allison Holdings sports a Zacks Rank #1, Volkswagen carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Holdings has an expected long-term earnings growth rate of 10%.

Volkswagen has an expected long-term earnings growth rate of 8.9%.

Today’s Stocks from Zacks’ Hottest Strategies

It’s hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 – Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 – Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we’re willing to share their latest stocks with you without cost or obligation.

See Them Free>>


Article printed from InvestorPlace Media, https://investorplace.com/2017/10/toyota-tm-form-joint-venture-mazda-mzdaf-ev-technology-ggsyn/.

©2024 InvestorPlace Media, LLC