'Electrical Alliance', Tesla and Toyota join to produce Electrical Vehicles.

Toyota, the world's largest seller of hybrid autos, in May said it would invest $50 million in Tesla and jointly develop electric models with the U.S. startup. Both prototypes are modified Toyota vehicles, said JB Straubel, Tesla's chief technology officer.

Tesla Motors Inc. said it will deliver two rechargeable prototype electric cars to Toyota Motor Corp. this month as a first step in their alliance.

“Since our announcement in May, Toyota and Tesla engineering teams have made a lot of progress in a short amount of time, and it is exciting to start seeing some initial results,” Straubel said in an e-mail message. Tesla has signed an agreement to deliver two prototypes to Toyota by the end of July, he said.

Toyota's partnership with Tesla, maker of the $109,000 electric Roadster sports car, is the first of more such alliances the Japanese company wants to pursue in advanced auto technologies, President Akio Toyoda told reporters Friday in Nagoya, Japan. Carmakers including Toyota are under pressure in the United States and other markets to develop models that consume little or no petroleum and emit fewer gasses linked to global warming.


The project with Tesla, of Palo Alto, Calif., is separate from a previously announced electric car Toyota plans to sell by 2012, Toyoda said. Toyota has said it's working on a two-passenger “urban commuter” electric car that will likely have range of 50 miles or less per charge.

The prototypes Tesla is preparing are based on two current Toyota vehicles that are being fitted with Tesla battery packs and motors, Straubel said, without elaborating.

Ricardo Reyes, a Tesla spokesman, declined to provide details of the two models.

Toyota is pursuing a multidirectional strategy for future vehicles that includes autos powered by hydrogen, batteries and other alternative fuels, Toyoda told reporters yesterday.

“We're building a prototype which is equipped with an electric vehicle unit,” Toyoda said. Toyota will provide updates “at each stage of development,” he said, without elaborating.

Tesla raised $260 million in an initial public offering last month. Unlike Toyota, Nissan Motor Co. and other companies planning battery models, Tesla vehicles use thousands of the same type of small lithium-ion battery cells that power laptop computers.

Toyota wants to study that approach to see if it offers advantages over using larger types of battery cells, Toyota Executive Vice President Shinichi Sasaki said.

The development program with Tesla will be led by Toyota's U.S. engineering group, said Masami Doi.

Tesla is also working with Germany's Daimler AG on electric vehicles and has supplied battery packs for use in Daimler's Smart minicars. Daimler has also invested at least $50 million in Tesla.

Src: Bloomberg News