It's difficult to succeed by going it alone; only through open cooperation can we achieve mutual benefits. Amid the turmoil in the automotive industry, which alliances are forming? Which intentions for cooperation are brewing?

In-volution, the inward evolution in sociological terms, commonly known as "involution," is igniting heated debates in the automotive market. Especially in the recent Chinese market, executives from automakers are engaging in heated debates about "involution" and its accompanying competition, each expressing their own insights, doubts, and even profound transcendental understandings. Among the many statements, viewpoints such as orderly competition, long-termism, and "good money driving out bad" vary, but all acknowledge that "involution" is an inevitable process of market competition and a catalyst for driving the industry to adapt to transformational waves. Opponents argue that a reflection is urgently needed: the leading edge of "involution" is fragile, the industry has yet to reach a stage of healthy development, and peripheral competitors are observing with economic strength and room for maneuver. Of course, stepping away from the debate over coping with "involution," behind the hustle and bustle, some common explorations of cooperation mechanisms and technological standardization are occurring in parallel. After all, examples of shaping the industrial landscape through one's own efforts are few and far between. Under today's market pressures, cooperation with a "vertical and horizontal alliance" meaning is also in full swing.

"Internal Combustion Engine Alliance" Advancing Together

In April 2023, Toyota underwent a change in leadership. At that time, Toyota's new leadership team, headed by Koji Sato, was focused on "inheritance and evolution," aiming to reverse the group's previous lagging stance of "wavering attitudes" towards electrification and to find more development options to achieve its carbon neutrality vision. Through its operational adjustments over the past year, it can be seen that the new leadership's series of decisions have indeed accelerated Toyota's progress towards electrification and intelligence, enabling it to continuously develop in the manufacture and research of new electric and hybrid products: on one hand, progress in integrated casting technology and solid-state battery technology has been disclosed; on the other hand, it has reorganized its autonomous driving and artificial intelligence subsidiaries, focusing on the future mass production and large-scale deployment of autonomous taxis for joint ventures in the Robotaxi field. But this does not mean that Japanese automakers centered around Toyota have abandoned the transitional path between seeking electrification and maintaining the status quo. In fact, according to consolidated financial reports from multiple Japanese automakers for fiscal year 2023 (ending March 2024), as compiled by Nikkei, Toyota, Honda, Suzuki, and Mazda all achieved record-high profits.

Among them, Toyota's final profit reached 4.94 trillion yen, double that of fiscal year 2022, setting a new record for the highest profit among Japanese enterprises in the manufacturing industry. The main reason is that in addition to the financial report stating "using high product competitiveness to lock in models that can increase prices for product promotion and cost reduction," the good sales performance of hybrid models, which account for nearly 60% of the global market share, has been the main factor contributing to its performance. Thus, driven by high commercial returns, continuing to deepen the development of internal combustion engine technology and adapting respective electric drive integration technology routes seems to be a common choice for Japanese automakers. On May 28, Toyota Motor, Mazda, and Subaru held a joint press conference, pledging to continue investing in internal combustion engine technology and to decarbonize internal combustion engines by integrating them with electrification technologies and making them compatible with green alternative fuels (such as biofuels and synthetic fuels).

This joint action by the three companies is seen as a technical alliance for carbon-neutral internal combustion engines coming together.

All three companies stated that future automotive internal combustion engines will exist in the form of zero-carbon hybrid-specific engines, so they will continue to develop their respective "representative" powertrain systems, including Subaru's horizontally opposed engines, Toyota's inline four-cylinder engines, and Mazda's rotary engines. For the next-generation engines, these three companies will not only seek to improve the performance of individual engines but will also leverage their respective advantages to optimize their integration with electric drive units. At the same time, the three parties also expressed their intention to cooperate in the following areas: sharing technical information and R&D resources to reduce R&D costs and improve R&D efficiency; jointly formulating carbon emission standards for internal combustion engines and promoting the industrialization of related technologies; and