Toyota Motor Corporation (TM  ) has entered into an agreement with Panasonic Holdings Corporation (PCRFY  ) to make one of their joint ventures, Primearth EV Energy Co., Ltd. (PEVE), a wholly-owned subsidiary.

The move is expected to strengthen the capabilities of mass-producing automotive batteries. The acquisition is scheduled to take place in late March.

Among Toyota-affiliated companies, currently PEVE, Toyota Industries Corporation, and Prime Planet Energy & Solutions, Inc. (ownership: Toyota 51%, Panasonic HD 49%) mass produce batteries for hybrid electric vehicles.

Along with HEV batteries, PEVE plans to begin producing batteries for BEVs and PHEVs. The ability to produce various electric vehicle batteries will enable Toyota to respond flexibly to growing battery demand.

Also, manufacturing competitive batteries will enhance the appeal of Toyota's electric vehicle offerings while helping achieve carbon neutrality.

Price Action: TM shares are trading higher by 1.79% at $248.20 in premarket on the last check Tuesday.