Toyota (TM) Partners With Chinese Firms for Fuel-Cell Systems

Toyota Motor TM and five Chinese OEMs, including Beijing SinoHytec, China FAW Corporation Limited, Dongfeng Motor Corporation, Guangzhou Automobile Group, and Beijing Automotive Group, have signed a joint-venture (JV) agreement forming United Fuel Cell System R&D (Beijing) Co., Ltd. (FCRD). The JV is aimed at supplying fuel-cell systems for commercial vehicles manufactured by the Japanese automaker in China and strengthen its ties with the Chinese companies.

The JV will concentrate on designing low-cost, efficient fuel-cell systems and related components needed for the widespread adoption of fuel-cell electric vehicles (FCEVs) for commercial application. Reportedly, the overall investment amount is estimated to be 5.02 billion yen ($46 million). Toyota is likely to hold a 65% share of the venture.

To capitalize on the accelerated global shift to electric cars, Toyota is deepening its focus on manufacturing electric and fuel-cell vehicles, which will bolster the company’s product competitiveness. Notably, since the 1990s, Toyota has been focusing on fuel-cell technologies. In 2014, Toyota’s hydrogen-powered Mirai was launched. Further, this January, Toyota unveiled the second-generation Mirai sedan, which includes technical design improvements. Toyota is also promoting the production of hydrogen fuel infrastructure in large metropolitan areas worldwide, which will allow drivers to refill their FCEVs almost as conveniently as drivers of gas-powered cars.

By 2025, Toyota plans to introduce fuel-cell-enabled SUVs, and pick-up and commercial trucks. Additionally, the automaker is working on hydrogen fuel stations in collaboration with various partners. It aims to generate half of its global sales from electric vehicles by 2025.

Zacks Rank & Stocks to Consider

Toyota currently sports a Zacks Rank #5 (Strong Sell). Shares of Toyota have depreciated 6.1%, year to date, compared with the industry’s decline of 9%.

Some better-ranked stocks in the same sector are Halfords Group Plc HLFDY, Adient PLC ADNT and Niu Technologies NIU. While Halfords sports a Zacks Rank of 1 (Strong Buy), Adient and Niu carry a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Halfords have rallied 31.2%, year to date, as against its industry’s decline of 7.9%.

Shares of Adient have appreciated 4.8%, year to date, as against the industry’s decline of 8%.

Shares of Niu have gained 35.4%, year to date, as against the industry’s decline of 8%.

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Click to get this free report Toyota Motor Corporation (TM) : Free Stock Analysis Report Adient PLC (ADNT) : Free Stock Analysis Report Halfords Group Plc (HLFDY) : Free Stock Analysis Report NIU TECHADR (NIU) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research