Toyota and Subaru are expanding their electric vehicle collaboration with a new three-row EV that will be built in Kentucky, according to sources familiar with the plans. The new EV, which is expected to be similar in size to the Subaru Ascent, will be launched in 2025, shortly after Toyota starts producing its own version of the vehicle, tentatively called the bZ5X.

The two Japanese automakers have already teamed up on developing and manufacturing the Toyota bZ4X and Subaru Solterra compact crossovers, which are slated to hit the market in 2022. However, those vehicles are assembled in Japan and have faced production delays due to a wheel defect that caused them to fall off.

The new three-row EVs will be powered by batteries supplied by Toyota’s plant in North Carolina, which is under construction and scheduled to start operations in 2025. The plant will have six battery production lines, four for hybrid vehicles and two for electric vehicles. Toyota has invested $5.9 billion in the facility, as part of its plan to launch 10 EV models globally by 2026 and spend more than $37 billion on EV development and production by the end of the decade.

The location of the final assembly and the battery sourcing may also give the new EVs an advantage over their smaller siblings, as they could qualify for the full $7,500 federal tax credit for purchases under the Inflation Reduction Act, which the bZ4X and Solterra do not.

The partnership between Toyota and Subaru allows both companies to leverage their respective strengths and share costs and risks in the competitive and fast-growing EV market. Toyota owns about 20 percent of Subaru, which holds a 0.3 percent stake in Toyota.

Toyota’s Georgetown plant in Kentucky, where the new EVs will be built, is undergoing a $461 million investment announced in 2021. The plant currently makes the Camry, Camry Hybrid, RAV4 Hybrid, and Lexus ES, as well as four- and six-cylinder engines. It will also start producing hydrogen fuel cell drivetrains for heavy-duty trucks in December. The production of the Lexus ES will be phased out from Georgetown in 2025 and moved back to Japan.

Subaru has not revealed the name or other details of its three-row EV, but it has said that it plans to have four battery-powered crossovers in its lineup by 2026. The company’s U.S. assembly plant in Indiana, where it makes the ICE-powered Ascent, Outback, Crosstrek and Legacy, will continue to operate at full capacity.