Toyota Divests Stake in Tesla and Ends EV Collaboration

Toyota has severed all ties with Tesla and divested its stake in the electric car manufacturer. Toyota was one of the early investors in Tesla Motors and the two companies had collaborated on an electric variant of one of the Japanese car manufacturer’s most popular models, the RAV4 SUV.

Toyota had sold its stake in Tesla some time last year and made a handsome profit on the deal, given the sustained surge in Tesla’s stock price. Toyota ended its technical collaboration with Tesla with the production of the 2014 RAV4 electric. Toyota sold a large amount of Tesla stock at that time.

Toyota seems to have decided to venture into the electric car segment on its own. Last November, the company had announced that it would create its own electric vehicle division. This means that it would have to catch up quite a bit with other leading automotive companies like Nissan, GM and Honda who have already launched their very own electric models. There is still significant doubt about whether Toyota’s leadership is committed to developing all-electric vehicles.

Toyota seems to have focused instead on the development of hydrogen fuel-cell vehicles like the Mirai, a technology that is supported by the Japanese government. The Mirai, however has not received an encouraging response from consumers.

In 2015 and 2016, Toyota sold only about 40 Mirais on a monthly basis in the United States. One reason could be the fact that there are only 35 commercial hydrogen fueling stations across the United States.

Another company which had partnered with Tesla and then decided to make its own electric vehicles is Daimler. Tesla initially made drivetrains for the electric Mercedes Benz B-Class. However, Daimler has since severed its ties with Tesla and is developing the technology inhouse.

The spit with Toyota will mean that Tesla will now have to compete with conventional car manufacturers as they venture into the electric car segment. Tesla will however, no longer have to share its expertise and parts with other carmakers.