Japanese giants Toyota and Panasonic, which announced four months ago they will be launching a joint venture to make electric vehicle batteries next year, leveraging the heft of one of the world's largest automakers and battery makers, are reportedly preparing to establish a firm in Turkey.

It was among the decisions of the Competition Board on Wednesday, according to a report in the Turkish language daily, Habertürk. According to the decision text of the board, it was stated that Toyota and Panasonic were given permission for the establishment of a joint venture that will engage in research and development (R&D) production and sales of prismatic lithium-ion automotive batteries and R&D activities related to other automotive battery technologies.

Accordingly, the "heart" of the electric vehicles, namely batteries, will be built at the facility Japanese giants plan to establish. The fact that these batteries, which are one of the most expensive parts of these automobiles, will be produced in Turkey also closely interests domestic models that are being manufactured in the country.

Such that, if the electric vehicles produced within the country use the batteries that will come out of Japanese firms' Turkish plant, there is a possibility it will pull down the prices.

There is yet no fully electric car production in Turkey. However, since 2016, Toyota Turkey has been producing the hybrid vehicle C-HR at its factory in the industrial Marmara province of Sakarya. Earlier this year, the automakers also launched the production of Corolla hybrid, a trademark car of the brand, in the same factory.

Reports suggest that the prices of these two models that will likely have an opportunity to change their batteries with the ones manufactured indigenously will see a downward trend with the effect of the advantage cost that will be created.

Besides Toyota, the fact that the hybrid version of Clio, the locomotive model of the French automaker Renault, will be produced in Oyak-Renault plant in Bursa, points out to a possibility of customer variety for the Japanese.

On the other hand, the fact that Toyota and Panasonic will be carrying out battery production in Turkey also concerns closely the domestic automobile Turkey aims to manufacture and which will likely hit the streets in 2022. It will be a fully electric vehicle with a 500-kilometer range.

In such a situation, the domestic automobile may be offered to the customers at a much lower price by achieving an important cost advantage compared to an imported battery. Meanwhile, Toyota will own 51% of the joint venture, and Panasonic will own the rest. The said move is aiming to move the Japanese manufacturers ahead in the race with the Chinese firms.

In addition, Panasonic, which already provides a battery to U.S. electric car maker Tesla, wants to diversify its revenue sources by cooperating with Toyota and therefore wants to reduce its dependence on the U.S. electric car maker.

Former Toyot

a Turkey CEO Hiroshi Kato, in a statement he made last year, has reportedly said in case a hybrid version of the Corolla is produced in Turkey, an investment for battery production may come to Turkey.

"In terms of our costs, local producers are at the forefront. In case of a global battery manufacturer in Turkey that meets our criteria, we would use our first choice in that direction," he said.