Japanese automakers Toyota Motor Corp and Mazda Motor Corp announced on Friday they will build a $1.6 billion U.S. assembly plant as part of a new joint venture, while Toyota will take a 5 percent stake in its smaller rival.

The plant, which is planned to start operating in 2021, will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people, according to a company filing.

They also said that they would consider joint development of electric vehicles, as tightening global emissions regulations prompt more automakers to develop battery powered cars.

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May 13 /2015/Tokyo/Japan Toyota motor Co president Mr Akio Toyota and Mazda Motor corp president Masamichi Kogai shake hands after press conference in Tokyo Japan May 13 2015 Toyota Motor and Mazda Motor agree to expand tie-up on Eco,safety technologies./Photo by Noboru Hashimoto/Corbis/ (Photo by noboru hashimoto/Corbis via Getty Images)