Toyota Pulls Plug on Long-Standing Relationship with Tesla
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Toyota has revealed that it had sold off all of its remaining shares in Tesla Inc., the Silicon Valley-based battery-electric automaker, ending what had once been seen as a promising tie-up.
The move – completed by the end of 2016 – comes as Toyota ramps up its own, tenuous electric vehicle program, shifting some of its resources away from its long-standing hydrogen fuel-cell program.
The timing would suggest that Toyota made a solid profit on what had originally been a $50 million investment for a 3% stake in Tesla, which is based in Palo Alto, California. But the Japanese maker might have missed an opportunity to turn even greater returns had it held onto its TSLA shares a bit longer.
It’s not clear precisely when Toyota sold its holdings off, but Tesla hit a 52-week low of $181.47 on Dec. 2, 2016, marking the bottom of months-long doldrums. It began to rebound at that point, topping $200 by the holidays, nearly $220 when Wall Street reopened in January, and in recent days, shares have closed as high as $341.
For a company the size of Toyota, the difference would barely come in as a rounding error on its bottom line. What’s perhaps more significant is what the decision to sell off its holdings says about the direction the two makers have been taking.
Feeling pressure to come up with clean powertrain technology, especially by California and other states adopting emissions standards tougher than federal guidelines, Toyota decided to turn to Tesla rather than launching its own major EV effort. The two came up with a battery-powered version of the familiar RAV4. Sales were modest, at best, and the battery-electric SUV only lasted in production for a couple years.
There was plenty of talk about other joint ventures. Toyota also appeared to be signaling a longer-term affiliation when it sold Tesla the by-then abandoned Fremont, California, assembly plant it had once operated as part of a joint venture with General Motors.
The move – completed by the end of 2016 – comes as Toyota ramps up its own, tenuous electric vehicle program, shifting some of its resources away from its long-standing hydrogen fuel-cell program.
The timing would suggest that Toyota made a solid profit on what had originally been a $50 million investment for a 3% stake in Tesla, which is based in Palo Alto, California. But the Japanese maker might have missed an opportunity to turn even greater returns had it held onto its TSLA shares a bit longer.
It’s not clear precisely when Toyota sold its holdings off, but Tesla hit a 52-week low of $181.47 on Dec. 2, 2016, marking the bottom of months-long doldrums. It began to rebound at that point, topping $200 by the holidays, nearly $220 when Wall Street reopened in January, and in recent days, shares have closed as high as $341.
For a company the size of Toyota, the difference would barely come in as a rounding error on its bottom line. What’s perhaps more significant is what the decision to sell off its holdings says about the direction the two makers have been taking.
Feeling pressure to come up with clean powertrain technology, especially by California and other states adopting emissions standards tougher than federal guidelines, Toyota decided to turn to Tesla rather than launching its own major EV effort. The two came up with a battery-powered version of the familiar RAV4. Sales were modest, at best, and the battery-electric SUV only lasted in production for a couple years.
There was plenty of talk about other joint ventures. Toyota also appeared to be signaling a longer-term affiliation when it sold Tesla the by-then abandoned Fremont, California, assembly plant it had once operated as part of a joint venture with General Motors.
