The deal, announced ahead of the Tokyo Motor Show, highlights the importance of green technology in the auto industry, as well as the ballooning costs of developing multiple powertrains when customer preferences remain varied and uncertain.
Toyota, Japan’s No. 1 automaker, whose strength lies in gasoline-electric hybrid technology, has struggled in Europe, where diesel power has led the way in fuel-efficient cars.
Meanwhile, BMW, the world’s biggest maker of luxury cars, has experience with diesel but had fallen behind bigger rivals in hybrid systems and lithium-ion batteries, which are still difficult and expensive to produce.
BMW will supply Toyota with 1.6-liter and 2-liter engines for its models in Europe beginning in 2014, the automakers said in a statement.
The two companies will also jointly develop next-generation lithium batteries, a key technology used in technologies including laptop batteries and electric cars.
“Toyota and the BMW are perfect partners,” said Klaus Draeger, a member of the board of management at BMW. “By carrying out basic research together, we want to speed up development of battery-powered technology. Whoever has the best batteries in terms of cost and function will win more customers.”
The chief executive of Toyota Motor Europe, Didier Leroy, said that an alliance would let both sides bolster efficiency, improve economies of scale, reduce development costs and achieve quicker speeds to market.
Executives from both sides said equity ties had not been discussed.
Eager to move on after a year plagued by natural disasters and a punishingly strong yen, Japanese automakers have used the Tokyo Motor Show as a sometimes bewildering showcase for cutting-edge environmental technology.
Toyota began taking orders in Japan for the plug-in version of its popular Prius hybrid and also showed off all-electric and fuel cell prototypes. Honda Motor said it would start selling an electric version of its Fit subcompact in the United States and Japan next year.
And Nissan — whose all-electric Leaf compact car has put it a step ahead in the green technology race — has wowed visitors with an ultramodern prototype electric car called the Pivo 3, which can drive itself and has wheels that let it turn in a near-complete circle.
Carlos Ghosn, Nissan’s chief executive, has been more aggressive than most in pushing all-electric vehicles. But he conceded that no single green technology would dominate. “You need to prepare the technologies,” he told The Associated Press.
Toyota, though a leader in hybrid technology, has been less than enthusiastic about all-electric cars, pointing out problems with range and driving power, for example. Toyota does not yet have an all-electric vehicle in its normal lineup.
Akio Toyoda, chief executive of Toyota, seemed to wax lyrical about gasoline cars at a news briefing Wednesday, saying, “Personally, I love the smell of gasoline and the sound of an engine.”
Still, alliances have been one way that Toyota has hedged its bets: It has forged partnerships with Aston Martin and Ford, and last year, it announced a tie-up with Tesla Motors, the Silicon Valley-based maker of high-end electric cars. The search for better batteries has also resulted in ties with electronics makers like Sanyo Electric and Panasonic.
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