The venture, Prime Planet Energy & Solutions Inc, is now the world's largest supplier of batteries for hybrid vehicles, and was created in April by pooling part of the battery-related equipment and engineers of the two firms.
But it has a share of only 3% in the high-capacity battery market for electric vehicles, lagging far behind China's Contemporary Amperex Technology Co Ltd (CATL) with a share more than 20%.
Prime Planet is moving to standardise battery designs and helping streamline operations of materials suppliers, its president, Hiroaki Koda, told a news conference.
"With efficiency ten times higher, we can win over the Chinese," Koda added.
Toyota, which targets electrified vehicles to bring in half its global sales by 2025, has also partnered with CATL and Chinese EV maker BYD Co Ltd for battery procurement.
Koda declined to give a time frame for the efficiency target or the scale of consequent cost reduction, but said the company would probably improve by five to six times the next version of its product, now being worked on.
Asked about Tesla Inc's promise to halve battery costs over the next several years with new technology and processes, Koda said Prime Planet had similar plans regarding technology.
"Tesla publicly announced that, so it means they will do it," said Koda, a former procurement executive at Toyota. "I respect that."
Prime Planet has taken over Panasonic's business in thin, rectangular-shaped prismatic batteries, while Panasonic retained its business with Tesla for cylindrical batteries of a type similar to those used in laptops.
(Reporting by Makiko Yamazaki; Editing by Clarence Fernandez)
By Makiko Yamazaki