BMW and Toyota are set to collaborate on a number of elements for a sports car by 2020 after initial discussions started in 2011 where both parties signed a memorandum of understanding.

The study for a jointly produced platform for a mid-sized sports vehicle will conclude by the end of 2013. New generation lithium-air batteries with a higher energy density than the current lithium-ion batteries are also in the works to be utilised in hybrid and electric cars.

They also expect to use a higher amount of lightweight materials, including reinforced composites including carbon fibre materials for the joint sports car platform. Toyota has plans to introduce a new fuel cell vehicle by the jointly developed technology by 2020.

According to an earlier agreement BMW will supply Toyota with 1.6-litre and 2.0-litre diesel engines for European models starting 2014. The collaboration will benefit both parties as Toyota can expand its range of diesel powered models in Europe while the Bavarian marque can partner with the biggest producer of hybrid vehicles, as it faces increasing competition from Volkswagen backed Audi.