Electric Car News

Why Toyota is no longer a Tesla shareholder

By the end of 2016, Toyota had sold all of its shareholding (estimated at 3%) at Tesla Motors for an amount that is approximately $500,000,000! The process of divesture begun in 2014 and saw Toyota make 10 times its initial investment into the American auto company brought to an end a 6 year partnership that has seen significant progress for Tesla and Toyota. According to sources from both Tesla and Toyota, the exit by the Japanese auto giant is a natural step that follows several months of stagnation without any new developments being undertaken.


The Tesla – Toyota partnership kicked off with collaboration on developing the RAV4 EV where Toyota was looking to gain insights into the American market policies and regulations on the development of electric vehicles. Since the RAV4 EV project, the Tesla – Toyota union has seen almost no further developments and it was expected that the companies would not remain in partnership for long.


The strikingly different business models were also not helpful to the marriage as Toyota is a mass production automaker that has sold millions of cars since the two came together while Tesla is still a long way from the 500,000 mark. Priorities would clearly clash in such collaboration and with no projects on the table it was only a matter of time before Toyota had to go look for bigger more mass aligned partners to work with on future EV projects.




Though there were no major milestones that were achieved from the Toyota – Tesla partnership, there are some exciting times ahead as these two former partners now hit the market as fierce rivals. While Toyota dabbled into the electric vehicle technology much earlier with the Prius which is a hybrid vehicle, Tesla has come in and in a few short years taken pole position as far as EVs are concerned. The fact that Tesla has also upped production numbers and is offering high end as well as standard electric vehicles will be another factor that further fuels the competition that is about to be witnessed between these two former partners.