Toshiba and Volkswagen will collaborate to develop drive units and power electronics systems for future electric vehicles.
The two companies have signed a letter of intent to work together as part of Volkswagen's project to build an affordable, zero emission, mass-produced electric vehicle.
The German auto maker is working with outside companies on different elements of the project. The two also plan to work together on Lithium Ion battery systems for electric vehicles.
"A considerable amount of research and development work still has to be carried out until we can produce the electric vehicle, in the field of lithium-ion battery technology in particular and this is an area in which the Volkswagen group is working with further potential technological partners including Toshiba," Volkswagen Chairman Martin Winterkorn said in a statement.
Toshiba recently began mass production of a new type of lithium-ion battery designed for use in such applications.
The SCIB (Super Charge Ion Battery) is based on proprietary technology developed by Toshiba and can charge to 90 percent of its capacity in a few minutes and is highly-resistant to short circuits even when crushed.
The SCIB is already being used in an electric bicycle and Toshiba has demonstrated it in a moped. It's also targeting the industrial vehicle sector with the battery.
Production is currently at the relatively low volume of 150,000 cells per month but Toshiba has announced plans to start building a new factory this year that will increase production to several tens of millions of cells per month.