Tesla Motors (TSLA, Financial) and Toyota Motor (TM, Financial) may be seen working closely with each other yet again. The electric carmaker’s CEO Elon Musk said that the company may sign a new agreement with the world’s largest automaker in the coming two to three years.
RAV 4, Picture Courtesy – Toyota Website
End marks the beginning
California-based Tesla has been the key supplier of batteries and motors to Toyota for its RAV 4 electric sports utility car. The car had gone on sale in 2012, but could churn out magic numbers for the Japanese automakers. Over this time frame Toyota managed to sell only 2,000 units of this vehicle. Quite understandably, the duo are ending their partnership. However, that’s not the end of their relation. Musk is quite optimistic about the future prospects, which is evident in this expression:
“If you look out maybe two or three years from now, I would not be surprised if there was a significant deal with Toyota and Tesla,”
Though the two companies currently do not have any plans that would need them to enter into any sort of collaboration, but Musk believes that there could be a chance for entering into a bigger partnership agreement in the future. While Tesla executive has shown reasonable interest to get together again, Toyota has restrained from commenting regarding any future possibility. Presently the Asian carmaker is getting ready to sell its first fuel cell vehicle.
The two auto giants have definitely not cut ties with each other. Musk cites that there are certain areas in North America where both Toyota and Tesla would have to work close together.
At the annual shareholders’ meeting Tesla said that the shortage in battery supply has been the key reason why the two would take around a couple of years or more to join forces. As of now, Tesla is trying to form alliance with Panasonic and a Japan-based company to put in money in its battery factory, called the Gigafactory, which is being built in Nevada. It is expected that Panasonic would contribute around 30% to 40% of the total investment required for the factory. The estimated cost is predicted to hover around $5 billion.
Impressive journey
Though there has been quite a bit of uncertainty regarding the prospects of electric cars, but Tesla’s efforts are very noteworthy. Also, electric cars are slowly but steadily gaining traction in the U.S. and other international markets. This improvement has been noted in Tesla’s performance as well. The company’s revenue growth pace surpasses the industry average of 12.2%. In comparison Tesla’s revenue leaped by a solid 89.9%.
Parting thoughts
This is a positive sign that people are gradually experimenting with electric cars. True, that currently electric cars are a niche market, with negligible presence compared with commercial gasoline vehicles. But where is it headed, and what is its future will depend on the upcoming offerings of electric carmakers. A sensitive projects such as these would require regular collaborations and alliances between two or more industry majors as it would lead to idea exchanges.
