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Tesla scores $100M supply deal with Toyota for RAV4 EV

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Electric car company Tesla Motors (s TSLA) has scored a coveted $100 million supply deal with Toyota to produce an electric version of Toyota’s RAV-4, according to a filing. Tesla already had a research and development agreement with Toyota for the RAV4 EV, but this is the first time that Tesla and Toyota have revealed that the R&D deal has turned into a much larger supply agreement.

The supply arrangement calls for Tesla to provide an electric powertrain system for the car, which includes a battery, a charging system, an inverter, a motor, a gearbox and software, according to the filing. The car companies say manufacturing of the RAV4 EV is expected to start in 2012 and continue into 2014 — $100 million is the estimated value of the entire manufacturing deal over that period of time. While there have been some reports in recent weeks that the RAV4 EV would only be sold to fleets, Tesla tells me that’s not true.

The deal comes at a really important time for Tesla. As I noted last month Tesla has been moving into a difficult financial period between when it stops producing its inaugural car the Roadster at the end of the year (which generated the bulk of its revenues), and when it will start making its second EV, the Model S sedan later in 2012. But this supply deal will go a long way toward keeping the revenues coming in.

For the most recent quarter that ended March 31, 2011, Tesla’s development services revenue hit $15.4 million, largely driven by its work on the RAV4 EV. Tesla said in March that the current RAV4 EV R&D deal was expected to deliver another $45 million in additional revenue for “the remaining development services which we currently expect to complete in the fourth quarter of 2011 or the first quarter of 2012.” In total, Tesla expected to reap about $60 million from the R&D portion of the Toyota RAV4 EV deal. Toyota also previously invested $50 million in Tesla.

Tesla’s stock shot up over 5 percent on the news to $29.30.

Watch our video interview with Toyota about the RAV4 EV:

4 Responses to “Tesla scores $100M supply deal with Toyota for RAV4 EV”

  1. Ron Wose

    My first entry into the electric car market was going to be the Rav4, however, since they are limiting it to 100 miles, about the same as the mercedes entry, I will probably pass, due to the fact that I would have to charge about 4 times to get to LA from the bay area. When Tesla can build a small sports car that can go 350 miles, I will probably wait for their sedan or some other higher mileage per charge electric that hits the market later. I can wait, I have no car payment right now, but am willing to purchase in the 30k range for an all electric rav4 type vehicle. I would like comments and followup emails re: others wanting to enter this market.

  2. Why would Toyota go to an unproven/inexperienced company to assemble a car and not even use any technology from said unproven company? Was Tesla purely created to break the union at Nummi for Toyota and market a poorly designed electric car? Hmmm, is this why Elon is so focused on rockets and not electric cars? And, the Republican’s bitch about the DOE loan guarantee to Solyndra. The DOE loan guarantee to Tesla is the one to go after.

    • ramon leigh

      We can only hope that those sleazy UAW extortionists stay unemployed and not raping the American consumers.
      Earning $140K at an unskilled job is obscene. No wonder Obama the Fool bailed out bankrupt GM and saved his campaign funding buddies at the UAW. Tesla has better engineering staff than GM – just compare their Model S with the crappy Chevy Volt (mostly sourced with Chinese parts, so that GGm can afford UAW worker salaries). Tesla will bury obsolete, consumer unfriendly GM. About time.

      • I think you are right on with GM. My thing is that I want an electric that will go from the bay area to LA with one charge. For them to build the RAV4 and go only 100 miles, is a slap in the face to Tesla, even though I like the company. They can build the RAV4 to go to LA. I may need to wait until I get what I want and that is distance, and I am willing to pay the difference. I may have to step up to Teslas seday which will be about 60K.