Toyota partners with Tesla to build electric RAV4

The world's largest car manufacturer Toyota Motor Corporation (Toyota) and US electric car maker Tesla Motors Inc (Tesla) said Friday that both the companies would jointly develop an electric version of Toyota's compact sports-utility vehicle RAV4, reaping the first fruits of a partnership announced two months ago.

In May, Toyota invested $50 million in Tesla for co-operation in the development of electric vehicles (EV), parts, production system and engineering support, when Tesla acquired a former Toyota-GM assembly plant in Fremont, California. (See: Toyota invests $50 million in Tesla Motors for electric car tie-up)

Under the new agreement, prototypes will be made combining Toyota RAV4 model with Tesla electric powertrain. Tesla plans to produce a fleet of prototypes within this year for evaluation by Toyota. The first prototype has already been built and is now undergoing test. Both the companies aim to market the electric vehicle in the US in 2012.

Tesla seeks to learn and benefit from Toyota's engineering, manufacturing, and production expertise, while Toyota aims to learn from Tesla's EV technology, daring spirit, quick decision-making, and flexibility, a joint statement said.

California-based Tesla co-founded by Elon Musk, who is also known for co-founding  PayPal and SpaceX, designs and manufactures electric vehicles and powertrain components, and is currently the only automaker in the US that builds and sells highway-capable EVs in serial production.

Automobile manufactures in the US and elsewhere have been becoming increasingly attracted to building little or non-polluting vehicles in the wake of growing environmental concerns and global warming.