Tesla and Toyota to develop electric version of RAV4

Toyota will pay Tesla approximately $60m for the development services to be provided by Tesla.

Tesla Motors and Toyota Motor (TMC) have collaborated to develop a validated powertrain system including a battery, power electronics module, motor, gearbox and associated software, which will be integrated into an electric vehicle version of the RAV4.

Under the agreement, TMC will pay Tesla approximately $60m for the development services to be provided by Tesla.

The companies had mutually agreed to the final specifications, deliverables and payment amounts and schedule within 60 days of the execution of the agreement, and the amount will be paid in instalments during the term of the agreement.

Tesla and TMC had earlier entered into an agreement to initiate the development of an electric powertrain system for the RAV4 in July 2010.

TMC purchased $50m of Tesla's common stock in a private placement transaction, which closed immediately subsequent to the closing of Tesla's initial public offering in July 2010.