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Tesla Received $ 60 Million for RAV4 Production

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On: Mon, Oct 18, 2010 at 12:37PM | By: Sherry Christiansen

Tesla Received $ 60 Million for RAV4 Production

Tesla recently negotiated a $60 million dollar contract with Toyota to develop the drive-train and other parts of an all-electric version of the Toyota RAV 4 SUV. Tesla plans to modify its lithium-ion battery packs, motors, power electronics, software, and gearbox in order to adapt to Toyota’s RAV 4 compact sport utility vehicle.

According to Tesla, the California-based automaker: “The terms of the deal, initially announced in July, were completed Oct. 6."

"Its initial investment in Tesla shows Toyota has decided electric cars aren't going to be fringe vehicles,” said James Bell, executive market analyst at Kelley Blue Book in Irvine, California. “Companies like Nissan and GM are heavily committed to electric car programs, and it looks like Toyota has decided to step up its efforts.”

In May of this year Toyota invested $60 million in Tesla Motors with the intention of the two companies working together to produce the electric RAV 4 and Lexus RX SUVs at Tesla’s newly acquired NUMMI plant in California. The deal was revealed in a Toyota regulatory filing this month which indicated that Tesla would design the battery systems, transmission, electric motors, software, and power electronics module for Toyota and Lexus SUVs.
The first electric Toyota RAV 4 prototype version was launched in Las Vegas last week to U.S. dealers, but will not be available to the public until 2012.

Toyota built its own electric RAV 4 back in 1997 in a test program, but discontinued it in 2003; the cars were very popular, however, and many people who leased them took the option to buy after Toyota decided to quit the program. Today there are still about 750–800 of the original electric RAVs on the road.

According to Khobi Brooklyn, a spokeswoman for Tesla, the $60 million payment from Toyota to Tesla is for research and development work for the battery pack and drive-train system completed by Tesla, not for other components and parts that will be developed in the future.

Telsa took over the NUMMI plant in Freemont, California this month to update the technology used for its Roadster sports car for the RAV 4, according to Toyota Motor Corporation.

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