Toyota Motor said on May 21 that it will acquire a $50 million 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," the companies said.
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 unionized 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 U.S. 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 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 5% or less.
Toyota 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.
Copyright Agence France-Presse, 2010