SHANGHAI (Reuters) - Toyota ( TM ) is planning to launch the first electric car model equipped with an advanced autonomous driving system similar to Tesla's Full Self-Driving for the Chinese market next year, one of its Chinese joint ventures said.

The JV with state-owned Guangzhou Automobile Group (GAC) aims to restore the Japanese automaker's market share in China by catching up with Chinese rivals on technologies in hybrids, batteries and intelligent vehicles.

The venture announced a series of innovation targets at an event in Guangzhou on Friday.

GAC Toyota said it would launch Bozhi 3X SUV next year as the first model to be equipped with the system that would enable advanced driving assistance for parking and navigation on highways and urban traffics. This would ensure its leadership in autonomous driving technology offerings among all foreign brands in China, it said.

GAC Toyota is developing the system with Momenta Global, a startup that develops autonomous driving software for automakers including Mercedes-Benz.

It also works with Huawei to use the latter's in-vehicle operating software starting with an electric sedan to be launched in 2025 for China.

The automaker also said it would roll out an iron phosphate lithium battery during 2026 and 2027 that could reduce the production cost of its bZ4X EV by 40%.

Toyota ( TM ) ranked fifth among all brands by car sales in China in the first four months of this year, when the Japanese brand saw a 22% drop from the same period in 2023, according to data from China Association of Automobile Manufacturers.

(Reporting by Zhang Yan, and Daniel Leussink; Editing by Emeia Sithole-Matarise)