Tesla Motors Inc, the maker of electric cars is planning to construct the largest plant for battery production in the world. The company announced that its deal to supply Japanese automaker Toyota Motor Corp with motors and battery packs for an electric crossover would end this year.
Toyota, which has a 2.4% stake in Tesla, based in Palo Alto, California, said back in May of 2012 it, would buy the components for the company for 2,600 RAV4 over a period of three years.
CEO of Tesla, Elon Musk said he had expected Toyota to extend its agreement that was worth initially up to $100 million.
Tesla said late last week that Toyota is expected to end the RAV4 EV model in 2014. While the deal generated more than $15.1 million in revenue for Tesla during the recently ended quarter through March 31, the production activities under the current program should end during 2014.
Conclusion of the program by Toyota comes while Tesla is expanding global sales of its electric sedans, which are priced at $71,000, and it readies its crossover Model X for 2015 delivery, along with another electric sedan that is lower-priced due in the next two to three years to hit the market.
The company is ramping up the supply of components for Daimler AG’s Mercedes B-Class electric vehicles as it plans its gigafactory for battery products, to cut the cost of the lithium-ion cell by as much as 30%.
Models like the RAV4 EV are selling mainly in the state of California, which is requiring the large automakers to offer some vehicles that are pollution free.
Toyota in all has sold almost 1,600 RAV4 EV’s since 2012 through the end of April, according to data from the company.
Toyota, in 2015, is expected to start sales in California for a sedan fueled by hydrogen cells, another that has zero-emission and one covering the ZEV mandate in California.
On Friday, Tesla stock was up 2.1% to end the day at $186.26 and had increased by 21% in 2014.
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