Toyota plans to sell its new petrol and hybrid engines to rival carmakers

Toyota plans to sell its next-generation petrol and hybrid engines to other carmakers as well. According to Automotive News, the company is aiming for annual revenue of about 1.5 billion euros (1.7 billion dollars) from engine and hybrid transaxle sales by 2032. It has set a order target of 500 million euros for this year, with deliveries expected to start in 2027.

Developing a brand-new combustion engine family from scratch is seen as a risky strategy as the industry shifts toward electrification. Most manufacturers are updating existing engines to meet emissions standards. Toyota, by contrast, plans to spread the research and development cost across a wider customer base by building new engines and selling them to third parties.

What the new Toyota engine family offers

First hints of the family were shared in 2024. It consists of three four-cylinder units: a 1.5-litre naturally aspirated engine, a 1.5-litre turbo and a 2.0-litre turbo. The engines are said to be more compact and efficient than earlier generations. The 1.5 turbo is meant to deliver the output of a conventional 2.5-litre naturally aspirated engine, while the 2.0 turbo is expected to offer more power and lower fuel consumption than the current 2.4 turbo unit. The source does not give power or torque figures.

The engines are designed to work fully integrated with hybrid systems. The 2.0-litre turbo can be used both in hybrid setups and as a standalone petrol engine. Its compact design should make it easier to adapt to different platforms and powertrain architectures. The twin-turbo 4.0-litre V8 developed for the GR GT, however, is not part of the external sales plan. It seems more likely to appear in a future Lexus or a high-end Century model.

Who the likely buyers are

Toyota has not officially named any potential customers. The company owns all of Daihatsu, 21.5 percent of Subaru and 5.1 percent of Mazda. Toyota, Lexus and Daihatsu together account for more than half of this production network, which builds around 16 million vehicles a year.

The Mazda CX-50 already uses Toyota's hybrid system. Subaru uses Toyota-built electrified components in its newest hybrid models, and Suzuki also draws on some Toyota engines. However, it is not certain that each partner will switch to the new engines. Mazda is developing its own Skyactiv-Z engine and hybrid architecture for the next-generation CX-5. Subaru, meanwhile, is sticking with its boxer engine design, which it says targets 50 percent thermal efficiency.