Business / Corporate

Tesla’s Musk keeps door open to future projects with Toyota

Bloomberg

As Tesla Motors Inc. and Toyota Motor Corp. conclude an initial vehicle project that met with mixed results, Elon Musk, Tesla’s chief executive officer, said his company may form another partnership with the giant Japanese carmaker.

“If you look out maybe two or three years from now, I would not be surprised if there was a significant deal with Toyota and Tesla,” Musk told reporters Monday in Tokyo.

While Tesla and Toyota have no definitive plans, Musk said he envisions a larger project than their deal for the RAV4 electric vehicle.

The comments came as the two carmakers wind down sales of the jointly developed RAV4 after delivering only about 2,000 since it went on sale two years ago. Since that project, both companies have taken separate paths, with Toyota now preparing to sell its first fuel-cell vehicle, a technology Musk has ridiculed.

Toyota had no comment on Musk’s remarks, said spokesman Ryo Sakai.

Tesla plans to build the world’s biggest lithium-ion battery plant to cut the cost of the cells used to power its electric vehicles. Such a facility will provide an opportunity to supply other manufacturers as sales of its own vehicles ramp up, Barclays equity analyst Brian Johnson said.

“With Tesla, you can never rule anything out. The gigafactory is huge capex (capital expenditure) for Tesla, so the more outlets you can spread it to, the better,” Johnson said. “There’s also an interest in maintaining good diplomatic relations with Toyota.”

While people with knowledge of the matter have said that the RAV4 EV project was marred by clashes between engineers, Musk said Monday that Tesla has “a very good relationship with Toyota.”

After having panned hydrogen-powered cars as “fool cells” in the past, he told reporters at an event Monday marking the start of Model S deliveries in Japan that there is some value in experimenting with other technologies.

At an annual shareholders’ meeting in June, Musk, 43, cited a squeeze in battery pack supplies as one reason why Tesla and Toyota will take a year or two before making any plans to build another vehicle together. Tesla selected Nevada last week as the site for its gigafactory.

The company is courting Panasonic Corp., another shareholder, to invest in the factory to supply cheaper batteries and help transform the maker of the $71,000 Model S sedan into more of a mass-market manufacturer.

Musk restated that he envisions Panasonic providing 30 to 40 percent of the investment needed for the facility. Tesla has estimated that the plant could cost as much as $5 billion by 2020.

“We are probably pushing Panasonic faster than they would normally go,” Musk said Monday. “I think it will turn out well for both companies.”

Panasonic spokeswoman Yayoi Watanabe declined to comment on Musk’s remarks, saying only that the company will be a major partner to Tesla.

“The speed at which Panasonic is making decisions is extremely impressive,” Musk said. “We really feel very honored that they would take a risk on Tesla.”