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Tesla to Deliver Prototype Electric Autos to Toyota

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Elon Musk, chairman and chief executive officer of Tesla Motors, stands for a portrait with a Tesla Roadster electric car outside the Nasdaq Marketsite in New York, on June 29, 2010. Photographer: Daniel Acker/Bloomberg *** Local Caption *** Elon Musk

July 10 (Bloomberg) -- Tesla Motors Inc., an electric carmaker working with Toyota Motor Corp. on battery-powered autos, said it will deliver two rechargeable prototypes to Toyota this month as a first step in their alliance.

Toyota, the world’s largest seller of hybrid autos, in May said it would invest $50 million in Palo Alto, California-based Tesla and jointly develop electric models with the startup. Both prototypes are modified Toyota vehicles, said JB Straubel, Tesla’s chief technology officer.

“Since our announcement in May, Toyota and Tesla engineering teams have made a lot of progress in a short amount of time and it is exciting to start seeing some initial results,” Straubel said today in an e-mail message. Tesla has signed an agreement “to deliver two electric vehicle prototypes to Toyota by the end of the month,” he said.

Toyota’s partnership with Tesla, maker of the $109,000 electric Roadster sports car, is the first of more such alliances the Toyota City, Japan-based company wants to pursue in advanced auto technologies, President Akio Toyoda told reporters yesterday in Nagoya, Japan. Carmakers including Toyota are under pressure in the U.S. and other markets to develop models that consume little or no petroleum and emit fewer gasses linked to global warming.

‘Tesla Ahead’

“The relationship between Toyota and Tesla is definitely not just for show. Both companies are going to benefit from it,” said John O’Dell, advanced vehicle researcher and senior editor for Edmunds.com, an automotive data company in Santa Monica, California. “Right now Tesla is ahead of everyone in terms of electronic controls for battery vehicles because they’re the only ones in the market.”

The project with Tesla is separate from a previously announced electric car Toyota plans to sell by 2012, Toyoda said. Toyota has said it’s working on a two-passenger “urban commuter” electric car that will likely have range of 50 miles (80 kilometers) or less per charge.

The prototypes Tesla is preparing are based on two current Toyota vehicles that are being fitted with Tesla battery packs and motors, Straubel said, without elaborating.

Ricardo Reyes, a Tesla spokesman, declined to provide details of the two models.

Toyota is pursuing a multidirectional strategy for future vehicles that includes autos powered by hydrogen, batteries and other alternative fuels, Toyoda told reporters yesterday.

‘Omni-Directional Approach’

“By having Tesla we think our omni-directional approach is becoming even more robust,” Toyoda said. “How they use batteries, how we use batteries, how the vehicles are used, there are many things we can share in these areas.”

Toyoda, 54, said the companies were already working on potential models, though he didn’t provide any details.

“We’re building a prototype which is equipped with an electric vehicle unit,” Toyoda said. Toyota will provide updates “at each stage of development,” he said, without elaborating.

Tesla raised $260 million in an initial public offering last month. Unlike Toyota, Nissan Motor Co. and other companies planning battery models, Tesla vehicles use thousands of the same type of small lithium-ion battery cells that power laptop computers.

Toyota wants to study that approach to see if it offers advantages over using larger types of battery cells, Toyota Executive Vice President Shinichi Sasaki said.

The development program with Tesla will be led by Toyota’s U.S. engineering group, said Masami Doi.

German Connection

Tesla is also working with Germany’s Daimler AG on electric vehicles and has supplied battery packs for use in Daimler’s Smart minicars. Daimler has also invested at least $50 million in Tesla.

Toyota fell 0.3 percent to close at 3,120 yen yesterday in Tokyo Stock Exchange trading, extending its decline this year to 20 percent. Toyota’s American depositary receipts fell 14 cents to $71.07 yesterday in New York Stock Exchange composite trading, and have declined 16 percent this year.

To contact the reporter on this story: Alan Ohnsman in Toyota City, Japan, at aohnsman@bloomberg.net

To contact the editor responsible for this story: Terje Langeland in Tokyo at tlangeland1@bloomberg.net

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