Hitachi and Honda have formalized a deal to develop motors for electric vehicles and hybrids.

Plans for the joint venture, which will be called Hitachi Automotive Electric Motor Systems, were announced in February, but the company wasn’t formally established until the third of this month.

The new group is based in the Ibaraki Prefecture of Japan and will be run by President Noboru Yamaguchi. It will be 51 percent owned by Hitachi, 49 percent by Honda.

SEE ALSO: Honda and Hitachi To Jointly Build Electric Motors For Themselves And Others

The joint venture will build motors for hybrid cars as well as pure EVs, with manufacturing in Japan, the U.S., and China. Honda wants Hitachi’s motor expertise, as well as the economies of scale possible from the larger joint venture. As emissions and fuel economy standards get more and more strict, the demand for hybrid and electric vehicles grows. That means that Honda has more in-house demand, but also sees room to sell to other automakers.

“Producing motors is capital intensive, so rather than just manufacturing them for our own purposes, we would like to produce in large volumes with the possibility of supplying a variety of customers,” said Honda CEO Takahiro Hachigo last February.

“In pairing up with Hitachi, we’re hoping to tap into its expertise in volume production,” Hachigo said.

Hitachi Automotive was established in 2009 and supplies motors to Nissan, Toyota, and GM. It also supplies lithium-ion battery cells to various automakers.

Automotive News