Toyota to terminate the deal with Tesla to supply batteries and motors by this year (Thenextdigit)

Palo Alto, California-based electric vehicle maker Tesla announced that its deal to supply battery packs and motors for a rechargeable crossover with Toyota will be ending by this year. Toyota uses these units on its RAV4 electric cars .

The news of concluding of the $15.1 million worth of the agreement came from Bloomberg, “Toyota is expected to end the current RAV4 EV model this year.”Till date, Toyota hasn’t revealed the sales number of its RAV4 electric car that retails for about $50.000, but we could say that it has sold small amount of RAV4s as the production volume wasn’t big.


 Yet Toyota has approximately the same powerplant as the Tesla Model S for up to half the cost.

As of now, Toyota has a 2.4 percent of stake in Tesla. In 2012, Toyota announced that it would buy Tesla’s battery packs and motors for over 2,500 RAV4 electric vehicles over next 3 years, but it looks like the deal is breaking up before the actual period. Tesla CEO Elon Musk was expecting Toyota to extend the deal, which was worth $100 million, initially.

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Though, Toyota hasn’t officially announced about conclusion of the deal with Tesla, the decision comes after Tesla announced to expand the sales of Tesla Model S sedans to the global markets, which has the starting price tag of $71,000. The company had also planned to release Model X crossover in 2015 and the affordable EVs in next 2-3 years.

Meanwhile Tesla is increasing its activity to supply more components to Daimler AG’s Mercedes B-Class electric cars via its soon to be setup world’s largest battery plant, that could save over 30 percent costs of lithium-ion batteries.

Since California requires large automobile companies to sell some environment-friendly vehicles, Toyota sold its most of the RAV4 electric vehicles (around 1,500) in the state since 2012. Starting in 2015, the company has also planned to sell hydrogen fuel cell sedans in California.