The announcement, made at this week’s Tokyo Motor Show, will see the companies work together on research into lithium-ion battery technologies.
They have also agreed to identify and discuss other possible collaborative projects.
As part of the memorandum of understanding BMW will also supply Toyota Motor Europe with 1.6 and 2.0 litre diesel engines from 2014. These engines will be installed in Toyota-produced vehicles planned for sale in the European market.
“Through this agreement, Toyota plans to expand its European lineup and sales of fuel-efficient, low CO2-emission diesel-powered vehicles,” said a joint statement.