Toyota Motor Corp. (7203) is discounting its all-electric RAV4 through low-cost lease and loan offers to boost demand for the slow-selling compact crossover, powered by a Tesla Motors Inc. (TSLA) battery pack and motor.
Toyota, the world’s biggest maker of hybrid autos, this month is promoting the option of a $299-a-month, three-year lease for the $49,800 light truck, or a 60-month, no-interest loan, according to the company’s website. The offers run through Sept. 3 and are available only in the Los Angeles and San Francisco regions, the vehicle’s main markets, said Carly Schaffner, a company spokeswoman.
Honda Motor Co., Nissan Motor Co. and General Motors Co. (GM) have also turned to discounted leases to buoy their rechargeable models. Toyota said last year it would sell 2,600 RAV4 electric vehicles by the end of 2014. At the end of July, just 709 had been delivered since sales began last September.
“The mass market, for the most part, has been reluctant to buy these products, given the high cost of the technology,” said Michelle Krebs, a senior analyst at auto researcher Edmunds.com. “Toyota may not have done enough to promote the car’s Tesla connection -- does anybody know it’s a Tesla underneath?”
The battery-powered RAV4 arose from Toyota President Akio Toyoda’s desire to work with Palo Alto, California-based Tesla, led by Elon Musk. The project was announced in 2010, when Toyota also invested $50 million in Tesla. The electric-car maker’s shares have surged almost fivefold this year, boosting the value of Toyota’s 2.4 percent stake to about $483 million.
Toyota, based in Toyota City, Japan, fell 0.8 percent to 6,160 yen as of 10:11 a.m. in Tokyo trading, trimming its gain this year to 54 percent. Tesla advanced 1.5 percent in New York trading yesterday, closing at a record $164.22.
Toyota, which has the biggest share of California’s auto market, is under pressure to sell the most rechargeable vehicles in the state to meet strict emissions rules. In addition to the electric RAV4, which goes about 100 miles (161 kilometers) per charge, Toyota sells a plug-in version of its Prius hybrid to meet state rules and will add a hydrogen-powered electric sedan in 2015.
“Given our pace this year, we are confident we’ll hit our sales target by end of 2014,” Toyota’s Schaffner said. “The use of our incentives is tactical, reinforcing our value and focus on keeping our products competitive in the market.”
Sales of Tesla’s Model S, priced from about $70,000, are rising, with the company planning to deliver 21,000 this year, compared with fewer than 3,000 in 2012.
Toyota’s U.S. sales unit is in Torrance, California.
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