Toyota announced two key moves today, saying it plans to take an ownership share in rival Japanese automaker Mazda and will pair with Mazda to build a U.S. assembly plant.

Reuters reports that Toyota announced plans to take a 5% share in Mazda Motor Corp. The alliance will include building a $1.6 billion plant in the U.S. and working together on electric vehicles.

“The plant, whose location is not yet public, will be able to produce 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people,” Reuters reports. “It will start operating in 2021.”

The report adds that the alliance is “an attempt to catch up with rivals in the race for electric car technology, as tighter global emissions rules loom, along with the entry of new players into the market.”