Toyota Motor Corporation (TM  ), along with Subaru Corporation (FUJHY  ), and Mazda Motor Corporation (MZDAF  ), have committed to developing engines designed for electrification and carbon neutrality.

The new engines will optimize integration with electric motors, batteries, and other drive components, while also enhancing vehicle design with more compact configurations.

These companies are expanding their options to decarbonize internal combustion engines by making them compatible with various carbon-neutral fuels.

They are working to ensure a future for supply chains and jobs connected to engines. Through extreme conditions in racing, they have broadened powertrain and fuel options, including vehicles running on liquid hydrogen and carbon-neutral fuels.

The new generation of engines will not only enhance standalone performance but also optimize their integration with electric drive units.

These engines will be compact, allowing for improved vehicle design and aerodynamic performance while meeting stringent emissions regulations.

The advanced engines will shift away from fossil fuels, supporting alternatives like synthetic fuel, biofuels, and liquid hydrogen.

The development is seen as a significant step toward broader adoption of carbon-neutral fuels.

Koji Sato, CEO of Toyota said, "In order to provide our customers with diverse options to achieve carbon neutrality, it is necessary to take on the challenge of evolving engines that are in tune with the energy environment of the future."

Despite their competition in the market, Subaru, Toyota, and Mazda share a commitment to carbon neutrality. They aim to create a sustainable future for Japan's auto industry through collaboration with partners.

Price Action: TM shares closed higher by 0.99% at $216.84 on Friday.