Toyota and Tesla to develop electric RAV4

The joint venture is a first for the companies since Toyota bought about 3% of Tesla for $50 million earlier this year. It is not known where the vehicle would be built or how much it might sell for.

By Jerry Hirsch, Los Angeles Times
July 16, 2010 | 8:58 a.m.

Tesla Motors Inc. and Toyota Motor Corp. plan to develop an electric version of the RAV4 SUV that would go on sale in the U.S. two years from now.

The venture is the first project announced by the companies since Toyota purchased about 3% of Tesla for $50 million earlier this year.

The automakers are already testing a prototype of the vehicle. Toyota is providing the body and other major components, and Tesla is contributing its battery system and electric power train.

Previously, Toyota has made a limited number of electric RAV4 autos, but never commercialized the vehicle. Tesla will build and deliver a fleet of prototypes to Toyota for evaluation this year.

"The Toyota RAV4 EV has been a terrific workhorse for the past decade. Hundreds of the original cars are still running seven to 10 years after manufacture in both fleets and private hands," said Paul Scott, a residential solar panel salesman and member of the Plug In America electric vehicle advocacy group.

"My car has 84,000 miles on the odometer and still runs exactly the same as the day I got it," Scott said.

The companies did not say where the new generation electric RAV4 would be built or how much it might sell for. A conventional gasoline-powered RAV4 sells in the low- to mid-$20,000s.

Each of the automakers stand to benefit from the program, said James Bell, an analyst with auto information company Kelley Blue Book.

"Toyota gets to reenergize a model that has grown somewhat stagnant in the market and is no longer considered an innovative option in the small crossover space, and Tesla can further monetize and prove that their style of battery and energy management can support large-scale usage," Bell said.

It's also good news for consumers looking for an electric vehicle larger than the Chevrolet Volt, Nissan Leaf and Ford Focus — electrics coming on to the market over the next several years, analysts said.

"The e-RAV4 will help expand the market for electric vehicles by giving 'soccer moms' and small business owners a vehicle they can use on a daily basis," said John Boesel, chief executive of Calstart, a clean transportation technology industry trade group based in Pasadena.

Tesla is trying to move past its reputation as a niche builder of high-end vehicles into the mainstream market. The Palo Alto-based company, which last month became the first U.S. automaker to float an initial public stock offering since Ford Motor Co. in 1956, currently sells limited numbers of $109,000 Roadsters.

It is also working on the $57,000 Model S sedan, which it plans to start selling in 2012. Tesla says the Model S will be able to accelerate from zero to 60 mph in under six seconds and will have a range of 160 to 300 miles on a single charge.

Tesla will begin make the sedan next year after it reopens the New United Motor Manufacturing Inc. plant in Fremont, Calif., which was formerly operated jointly by Toyota and General Motors Corp. Tesla acquired the plant earlier this year after Japan-based Toyota said it would no longer build cars in California.

News of the announcement pushed Tesla shares up 95 cents, or about 5%, to $20.84 in morning trading. Toyota shares fell $1.21, or about 2%, to $71.19.

"This decision shows concrete results from a partnership that raised many eyebrows. It is now starting to appear that maybe Toyota needed Tesla's technology as much as Tesla needed Toyota's investment," Bell said.

Boesel agreed, saying that Toyota's willingness to partner with Tesla to provide an electric version of one of the Japanese automaker's existing vehicles "suggests the partnership between the two companies is going to be a meaningful one." ... 5875.story