Toyota Ends EV Collaboration with Tesla

Toyota Motor Corp. says it sold its remaining shares in Tesla Inc. at the end of 2016 and has canceled a partnership the two companies formed in 2010 to develop electric cars.

Toyota spent $50 million to acquire a 3% stake in Tesla seven years ago when the EV maker launched its initial public offering. The two collaborated on developing an all-electric version of Toyota’s RAV4 small crossover vehicle that featured Tesla’s approach to harnessing hundreds of small lithium-ion batteries rather than using one large battery.

But reported plans for extensive production tieups between the companies never materialized. Toyota says it sold off a portion of its Tesla holding some time ago and hasn’t collaborated on EV technology with the company for some time, thus prompting the selloff.

Last November Toyota stepped up its own electric-car development effort, naming President Akio Toyoda to head a new EV planning unit. Previously Toyota expressed skepticism about battery-powered electrics, preferring either hybrids or fuel cell-based EVs.

The company’s change in strategy reflects a common goal among carmakers: a need to sell large numbers of zero-emission vehicles to meet impending fuel economy and emission targets in China, Europe and the U.S.