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Life After the RAV4 EV: Can Toyota Keep the Spark Alive With Tesla?

Source: Toyota

Not long ago, it was revealed through regulatory filings that the joint program between Tesla Motors (NASDAQ:TSLA) and Toyota (NYSE:TM) to construct the electric RAV4 crossover vehicle had come to an end. Toyota built most of the vehicle, naturally, and Tesla unsurprisingly supplied the electric powertrains. Neither side really let on what would happen to the relationship between the two automakers once the RAV4 contracts were up, and now, Toyota is hoping that it can continue working with Tesla in the future.

“Tesla has quite a clear business strategy for developing a better battery,” said Osamu Nagata, president and CEO of Toyota Motor Engineering & Manufacturing North America.“[Automakers] as well as suppliers need to work on developing better batteries.” Toyota is one of Tesla’s largest institutional shareholders and retains a 2.5 percent stake in the Fremont, California-based electric car maker.

Nagata made the comments to journalists in Boston, Automotive News reports. They come ahead of Tesla’s planned groundbreaking for its giant battery gigafactory next month in a location that is so far still undetermined, at least externally. The facility is expected to ramp up production of the lithium-ion battery cells that are crucial to the construction of its cars and other electric vehicles. It’s also expected to lower the cost of the cells by about 30 percent.

Tesla and Toyota originally revealed their initial agreement in 2012, and it saw Tesla deliver 2,600 battery packs for use in the RAV4 EV. However, while Tesla is banking fully on plug-in electric vehicles, Toyota is heading in the direction of hydrogen fuel cells, though that setup still requires a battery of some kind.

Source: Toyota

“I hope we can show the very strong capabilities of fuel cell vehicles so we can convince more and more people of the potential and possibilities of the fuel cell vehicle,” Nagata said, per Automotive News. Tesla’s CEO, Elon Musk, has been a rather vocal critic of hydrogen technologies, but Nagata took a more diplomatic approach and decided not to say whether fuel-cell technology is better than EV technology. Instead, he “proudly showed off a picture of Toyota’s FCV fuel cell vehicle that serves as the background on his cell phone,” according to Automotive News.

Not letting Musk have the final say, Toyota reportedly sees battery-electric vehicles “as viable only in select circumstances such as shorter distances,” like to and from public transit depots and a driver’s home, as well as for use on large corporate campuses, the CEO of Toyota’s North American region, Jim Lentz, said.

It’s hard to say where battery vehicles will end up. Currently, range problems are at the top of the list of concerns for EVs; however, the industry is still in its infantile stages, and the most significant research and development is perhaps still to come. The same can be said for hydrogen fuel cells. What we want to know is this: Why isn’t there room for both? For all three? In a world utterly dominated by gasoline vehicles, there should be plenty of room for alternative powertrains. 

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