TOKYO: Toyota Motor said on Friday it is to acquire a 50 million dollar stake in Tesla Motors and will jointly develop electric vehicles with the Silicon Valley firm.
Toyota and Tesla Motors, based in Palo Alto, California, “intend to cooperate on the development of electric vehicles, parts, and production system and engineering support,” they said in a joint statement.
Tesla said separately that it had bought a closed Toyota joint venture factory that once housed New United Motor Manufacturing Inc, known as NUMMI, a venture between the Japanese maker and General Motors.
GM pulled out of the venture last year as it restructured under government-backed bankruptcy protection. Toyota closed the plant earlier this year after reaching a deal with the plant’s 4,500 unionised workers.
The electric vehicles maker said it “will build the Model S sedan and future Tesla vehicles” at the plant in Fremont, California. The Model S is expected to be the first pure electric premium sedan, according to Tesla.
The deal brings together the world’s largest automaker and the only US manufacturer currently producing and selling highway-capable electric vehicles.
“I sensed the great potential of Tesla’s technology,” said Toyota president Akio Toyoda.
The two companies said Toyota has agreed to purchase 50 million dollars of common stock issued in a private placement by Tesla.
Toyota did not disclose how much its equity stake in Tesla will be but the Nikkei economic daily said the ratio was likely to be five percent or less.
Toyota, hit by massive global recalls in the recent months, introduced the first-generation Prius petrol-electric hybrid vehicle in 1997, and has produced around 2.5 million hybrids in the past twelve years.
The hybrid is the best-selling car in Japan. Toyota plans to introduce electric vehicles into the market by 2012.