Gigafactory Key to Next Chapter in Toyota and Tesla Relationship?

teslacarBack in May 2010, Toyota and Tesla announced a deal to jointly develop electric vehicles and parts, and to cooperate on engineering and production systems support.  The result of the partnership of the maker of the iconic gas-electric hybrid Prius and the maker of the equally iconic EV Roadster sports cars was an electric sports utility vehicle, the RAV4 EV.

Unfortunately, after years of poor sales, Toyota announced in May that they were closing the curtains on the electric SUV this year and shifting its gears into fuel cell powered cars.  This placed it heads on with Tesla’s vision of pure electric vehicles.  So both companies may have seen it best to part ways – back then.

But then, Tesla just recently announced its selection of North Nevada as the site of its $5 billion Gigafactory that will produce batteries, mostly for electric vehicles.  Also, Toyota executives said that they were still keen on keeping a stake in the Silicon Valley based automaker and maintaining ties.  Since most of the batteries Tesla currently produces ends up in its own vehicles because of burgeoning demand, increased electric vehicle battery production capacity at the Gigafactory may spur further business between the two companies.

Tesla CEO Elon Musk hinted as much, saying in a Tokyo news conference, “if you look at maybe two or three years from now, I would not be surprised if there is a significant deal with Toyota and Tesla.”  He added that it will involve higher volumes, but added that there were no definitive plans.  In addition to the Gigafactory, Tesla is also developing an autonomous driving system to be rolled out in part in three years’ time.

In the meantime, Nissan and BMW are trying to build an alliance with the electric vehicle pioneer.  They announced this after Toyota announced the end of the battery supply deal with Tesla.

What happens next in the Toyota-Tesla relationship is anybody’s guess.  But it’s quite sure that we haven’t seen the end of it.

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