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Toyota to sell new petrol engines to rival carmakers for $1.7 billion yearly
Toyota expects $1.7 billion in annual revenue from selling its new generation of combustion engines to other car manufacturers.
By Charlotte Redford · 1 min read
Toyota hopes to earn $1.7 billion a year by selling its new generation of combustion engines to other carmakers. The Japanese group intends to profit from a technology it developed for its own vehicles and offer it to outside brands.
The project illustrates the strategy of a carmaker seeking to make the most of its research and development investments, at a time when demand for combustion engines is changing. By opening its engines to competitors, Toyota turns in-house industrial expertise into a source of recurring revenue, a model that helps spread design costs over a larger production volume.
The announced sum, $1.7 billion per year, gives a measure of the financial stakes. For a group investing heavily in the electrification of its range, these engine sales represent a welcome addition, likely to support profitability during the transition to electric vehicles.
This type of supply agreement between carmakers is not unprecedented in the automotive industry, where technical partnerships and engine exchanges have been common for several decades. This approach follows that logic of pooling resources, in a sector facing very high development costs and increasingly strict environmental standards.
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