"Significant" New Tesla, Toyota Deal Likely Says Elon Musk | Edmunds

"Significant" New Tesla, Toyota Deal Likely Says Elon Musk

Just the Facts:
  • Tesla Chairman Elon Musk titillated the EV community by commenting that a new "significant" development deal with Toyota could happen within the next three years.
  • Toyota is no stranger to Tesla, which developed the battery pack and power electronics for Toyota's limited-production 2013 RAV4 EV.
  • Despite reports that the RAV4 deal ended in acrimony, Musk describes the relationship between the two companies as "very good."

TOKYO Tesla and Toyota have a long and seemingly bumpy relationship, but the two are on "very good" terms these days and may be talking about a new joint project in the electric vehicle segment, according to Tesla Chairman Elon Musk.

Musk isn't shy about hinting at Tesla's future plans, but often is very stingy with details — and that was the case with his Tesla/Toyota deal comment, made this morning at a press conference in Tokyo.

The companies have just wrapped up a project in which Tesla provided the batteries, motors and power electronics for the second-generation Toyota RAV4 EV, of which only 2,000 were built.

Rumors have had the two at odds over engineering procedures and personnel, and Musk recently and famously used the term "fool cells" in reference to  hydrogen fuel-cell electric vehicles, which Toyota is developing in favor of battery-dependent plug-in electric vehicles.

But Musk told reporters in Tokyo that "if you look out maybe two or three years from now, I would not be surprised if there was a significant deal with Toyota and Tesla." 

He said such a deal would be larger than the $100-million RAV4 project. His remarks were reported by Bloomberg News and confirmed for Edmunds by Tesla spokesman Simon Sproule.

Toyota had no comment on Musk's remarks, but the company — which plans to launch its first retail fuel-cell electric car next year and hasn't said "No" to future battery electric vehicles — has lots of reasons to help Tesla grow. Its $50 million investment in Tesla in 2010 is valued at nearly $750 million today thanks to Tesla's soaring stock price.

One arena in which the two could cooperate in the future would be battery systems.

Tesla is planning one or more massive battery manufacturing plants, or gigafactories as Musk calls them. The first Tesla gigafactory was just announced for the Reno, Nevada, area. And Toyota needs batteries for its successful hybrid cars, its upcoming fuel-cell electric vehicles, which use small lithium-ion storage batteries, and for any future battery-electric vehicles it might decide to build.

Edmunds says: News like this signals that interest in electric vehicles remains strong at Toyota, and it surely won't hurt investor interest in Tesla's stock.

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