A report earlier today said Toyota will launch an all-electric compact car in China in April next year that will use BYD's core technologies.

(Image credit: BYD)

After a report earlier today that Toyota is planning to launch electric cars with BYD technology in China, the latter has now responded.

"The project is still in the confidential stage of development, please refer to the announcement of both sides," Chinese media cls.cn quoted an unnamed BYD's source as saying.

Toyota will release an all-electric compact car in China next year that will use BYD's core technologies, including its lithium iron phosphate batteries and lower-cost engineering, Reuters reported earlier today, citing four people familiar with the matter.

The model will be unveiled at the Beijing Auto Show next April and will likely be the second model in Toyota's bZ series, but for now will only be sold in China, according to the report.

The model will be positioned below high-end electric cars like the Tesla Model Y and Nio ES6, but above the extremely cheap Hongguang Mini EV, the report said.

One of the people familiar with the matter said the model could cost less than 200,000 yuan ($30,000) to target a market in China that Tesla could target with a smaller car in the next two years.

Notably, Toyota and BYD announced the launch of their joint venture, BYD Toyota Electric Vehicle Technology Co Ltd, on April 2 of this year.

The joint venture is based in Shenzhen, with Toyota and BYD each holding 50 percent of the shares and 300 employees at the time of establishment.

The main role of the joint venture is the development of pure electric vehicles, and future new models are expected to be sold in Toyota and BYD's respective channels.

In mid-April, several Chinese media reported that BYD was providing Toyota with design, development and production work for electric vehicles.