Toyota Motors (NYSE: TM) and BMW have announced their intention to jointly produce a new sports car, as part of a long-term strategic collaboration that will also co-develop fuel cell, electrified powertrain and lightweight vehicle technologies. Car enthusiasts and investors have been anxiously awaiting tangible results of the collaboration, announced in 2012.

Toyota brings expertise in fuel cell energy technology to the collaboration while benefiting from BMW’s longstanding tradition of producing luxury sports cars. The unique partnership between the two auto industry leaders is creating quite a buzz, especially as more details of the projects emerge.

The Silk Road Project

The most highly anticipated aspect of this East-meets-West collaboration called the Silk Road Project is expected to result in a jointly produced sports car under each brand. Toyota's version is positioned as a successor to the popular Supra and a tier above the 86, a series of sports cars jointly developed by Toyota and Subaru selling as the Scion FR-S in the United States. BMW's version is expected to replace the Z4, with its sales steadily declining.

At the 2015 Geneva auto show, Toyota confirmed it had completed its product evaluation with BMW and started the development process. BMW then confirmed research and development (R&D) had begun and hinted that two distinctive cars were on the horizon. The two cars will share a frame and drivetrain and feature two completely different bodies.

The partnership integrates Toyota's latest hybrid technology with BMW's design team, known for some of the best sports cars in the world. BMW is charged with the development of the chassis and engine, with Toyota tackling the environmental and electric technologies. The Toyota version will reportedly be available in a 3-liter turbo and a plug-in hybrid powertrain, and the BMW version will ship in 2-liter turbo, 3-liter turbo and hybrid variations. The German automaker is also expected to use its lightweight carbon fiber to cut weight.

The Toyota seems much closer to production, while the BMW project is being delayed. It is widely expected that Toyota will unveil its first concept of its version at the 2016 Detroit or Geneva auto show in preparation for its 2018 market release. BMW has delayed its project and looks to have it ready for 2019 or 2020.

Hydrogen Fuel Cells

After partnering with Toyota for several years, BMW is showing progress in its work with hydrogen fuel cell energy, demonstrating Toyota's new technology built into a BMW 5-Series GT and an i8 sport coupe. The hydrogen-powered BMW prototypes feature high-pressure tanks, a battery pack larger than 1 kilowatt-hour, a fuel-cell stack and an electric motor rated at 180 kilowatts (242 horsepower). On a single charge, the powertrain provided a range of 310 miles. BMW's fuel cell project is not expected to produce market-ready products until sometime after 2020.

Toyota's fuel cell project is much further along, with the 2016 Mirai available for sale in California in late 2015. An issue facing the widespread growth of hydrogen fuel cell cars in the U.S. market is the lack of hydrogen facilities and the cost of hydrogen. Testers in Los Angeles averaged 56 miles per kilogram of hydrogen, with operating costs of 25 cents per mile – approximately three times more expensive than a Toyota Camry hybrid. It takes much less time to fully charge a hydrogen fuel cell car; Toyota promises that a full charge takes less than 10 minutes, compared to the 20- to 40-minute charge time of battery-electric cars.

Toyota suggests that the process of extracting hydrogen is more efficient than recharging battery-electric cars and that hydrogen can potentially be gleaned from every everyday resources, such as leftover lemonade. For those questioning the value of the hybrid technology, the Japanese automaker is providing free fuel to Mirai drivers through a $7,500 subsidy on three-year leases of the 2016 models. Toyota is targeting 3,000 U.S. deliveries of the $62,000 Mirai through 2017.