Honda is planning to team up with Hitachi Automotive to develop, manufacture and sell motors for hybrid and fully electric vehicles.

The joint venture will be established in July with investment of 5 billion yen.

The firms said the joint venture would be established in July with investment of 5 billion yen with Hitachi holding a 51% share and 49% held by Honda. The venture would be based in Japan with subsidiary operations in the United States and China, each with manufacturing and sales functions.

The motors would be used by Honda alongside the ones it currently manufactures itself in Japan. Hitachi Automotive Systems will also maintain the business relationships it has with vehicle manufacturers that receive their supply of motors from the company.

“With environmental conservation measures and regulations increasing on a global scale, the market for electric vehicles is expected to continue to grow,” the companies said in a joint press release.

Honda launched its first hybrid car, the Insight, in 1999. The carmaker also announced last week that it is partnering with GM to mass-produce hydrogen fuel cells.