One of the most successful carmakers of Japan, Toyota, has finally sold the last of the stake that it had in Tesla. It would seem that two companies went from being allies to becoming fierce competitors and that further cooperation became impossible.
The sale was completed in 2016, but the official announcement only came out this Saturday. The fact that even the last stake in Tesla was sold is proof enough that Toyota doesn’t have second thoughts about the decision, and that the partnership is truly over.
Now that the partnership is over, Toyota plans to launch their own version of an electric car. After that, their plans involve the development of autonomous cars, as well as work on their own hydrogen fuel cells. They’ve also stated that the decision to sell the stake came after doing a periodic review of the company’s investment portfolio.
Back in 2010, Toyota paid $50 million for around 3% of Tesla. This was a part of a bigger deal. The deal in question also included the sale of one of the assembly plants located in Fremont, California. The buyer was, of course, Elon Musk’s electric vehicle start-up company. Tesla wasn’t as successful back then as it is now since their fame truly came with the 2012’s Model S.
Akio Toyoda, the Toyota president, has said that there was a hope that this partnership might end up injecting some of the start-up management cultures into Toyota. They were willing to learn from Tesla and to pick up anything that the younger, fresher company had to offer. However, by 2014, the partnership started dying out, mostly because of the clash of the two cultures, bus also because of the fact that Tesla was too willing to risk it, while Toyota liked playing it safe.
Toyota decided that they can’t proceed like that, and they stopped the sales of Rav4 EV and started selling their stake in Tesla. The company filings suggest that around March 2016, Toyota had around 2.34 million shares in Tesla. Also, their balance sheet value was around $481m (¥53.1bn). And since the company sold all that connected them to Tesla during the course of 2016, it’s believed that this is the same amount that they got for the sale. However, Tesla shares went through the roof this year.
It’s believed that Toyota’s decision to get away from Tesla reached its peak when Tesla itself opened a store in Nagoya, Japan, which is Toyota’s home city. This act by Tesla showed Toyota that the American company is becoming a real competition.
When it comes to the electric car market, Toyota was believed to be one of the companies with most potential. Especially after their release of the hybrid Prius from 1997, that worked on gasoline and electricity. However, Toyota’s unwillingness to take risks, as well as doubts about the cost, range, and durability of battery made the company stand down and miss its chance when the idea of electric cars became popular.
And now, the company seems to be inspired by Tesla’s success, as well as enraged by the opening of Tesla store in Japan. They still have their doubts about electric car’s battery and its potentials. On the other hand, they continuously invest in hydrogen fuel cells, which is the tech that Musk has described as ‘incredibly dumb’.