What’s Up With That? Toyota Lessens Its Position In Tesla Motors

3 years ago by Jay Cole 62

Production Of The Toyota RAV4 EV Ceased Earlier This Year

Production Of The Toyota RAV4 EV Ceased Earlier This Year – Tesla Provided The e-Drivetrain And Battery Packs For The All-Electric SUV

Apparently the thing to do this week if you were an early investor in Tesla Motors…is to sell, as Toyota has reportedly lessened its position significantly in the California EV automaker.

Toyota's "Advanced Tech" Vehicles

Toyota’s “Advanced Tech” Vehicles

This comes after Tuesday’s announcement from Daimler that it had exited its Tesla position completely earlier this week.  In so doing the company  netted $780 million to its bottom line by selling the remaining 4.3% stake it owned  – Daimler’s original investment was for 9.1% of the company – purchased in 2009 (pre-IPO) for $50 million.

Toyota’s sale was reported by the Nikkei Wednesday and the exact amount is not yet known, however the Japanese company had held as much as 2.4% of Tesla, which it had purchased in 2010 for $50 million.   If Toyota sold half that position, it would have netted about $350 million dollars.

Once again, market analysts are debating the reason that Tesla’s two largest automotive investors and business partners are exiting the company at essentially the same time.  Do they know something the rest of us don’t?  Or are they just being fiscally prudent?

Tesla manufactured e-drivetrains for both the Toyota RAV4 EV (discontinued) and the current Mercedes-Benz B-Class Electric Drive.  Tesla shares (real time quote here) were unaffected by the news, and close up $4.19 (+1.81%) during an exceptionally strong day for the wider market.

Nikkei

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62 responses to "What’s Up With That? Toyota Lessens Its Position In Tesla Motors"

  1. DaveMart says:

    Both Toyota and Mercedes now have no reason to continue to hold a strategic interest in Tesla.

    Daimler has now announced that it is to roll out PHEV’s across most of its line, whilst tying in with Renault for the Smart, and presumably using LG Chem battery packs for that, or at any rate a non-18650 format.

    Toyota is happy that it can develop its fuel cell technology and has largely divested itself of Tesla interest now it is releasing them on the road, whilst continuing its own next generation battery research which would also use a different format.

    Both companies were able to have a hand in early development of BEVs, without devoting much management time, and as it turned out making a profit on their small stakes.

    Now that the market and technologies are much clearer, since they don’t fancy Tesla’s approach there is no point carrying it on, although presumably the small remaining Toyota stake gives them a good vantage point in a watching brief.

    Whether they are right or not on what technologies will prevail is beside the point.

    That is clearly what they have decided, and the directions they want to take instead of pursuing the Tesla big pack of commodity batteries meme.

    1. Lustuccc says:

      Fuel Cell Ha! Ha! Ha! Fool cell…

      Elon should watch his back. An 2accident” happen so quickly..

      1. DaveMart says:

        Thanks for the in-depth analysis.

        As noted however whether Toyota are correct or not is entirely beside the point.

        1. Brian says:

          I dunno, Dave. His analysis is pretty rock-solid. What do you have to offer besides quips and FUD? 😉

          On a more serious note, I also have to wonder if Toyota and Mercedes are starting to fear that they are feeding the mouth that will come to eat their lunch. For getting compliance cars on the road quickly, investing in Tesla made sense. However, moving forward they will need much more than a handful of cars in California. This requires much more in-house development. I’m with you – I think that their investment in Tesla was to buy time to bring their fuel cell cars to market, while remaining compliant with CARB.

          In any business, it’s not wise to support the competition.

          1. scottf200 says:

            Re: Eat their lunch
            “Keep your friends close and your enemies closer.”

        2. Lustuccc says:

          You’re welcome! Ha! Ha! Ha! Ha! oh boy!

    2. Josh says:

      Unlike Diamler, Toyota did not have a board seat, so their shares were not providing them with any inside information.

      According to this quote the real reason for Diamler to sell their shares is they got voted off the board.

      “Another angle that analysts are looking is the loss of Harald Kroeger’s seat in the board of Tesla. Based on inside sources, the governance committee of the American company decided that it should maintain a neutral position. Thus, it no longer considered Kroeger for re-election and its number of board of directors was reduced from seven to six.”

      1. pete g says:

        3 companies 3 analysis’s

        Toyota: Balance sheet
        Toyotas been heavily discounting and heavily advertising their vehicles. 80% of their profits last year came from currency trading benefits from a drop in the yen.

        Mercedes: Conflict of interest
        The Mercedes Model S dominates the market for high end Luxury Sedans with sales of 100,000 so far this year. With Tesla’s Model S sales projected at 50,000 next year it has emerged as a true competitor.

        Tesla: Blue Skies
        Tesla is still to small to go it alone, it is free to enter into partnership agreements with any other company. GM, Nissan or BMW can offer shared technology and Cash. While every other company can offer just cash. Tesla has a very good brand image so there shouldn’t be any shortage of suitors.

      2. notasmidgeon says:

        Daimler decided on the collar in late December. According to the proxy, the decision to drop the Daimler seat was made after that.

        1. Josh says:

          Thanks for that.

    3. Mint says:

      You’re reading too much into it. You don’t need a stake in Tesla to sign a production deal with them.

      They just feel the stock is not worth holding. It’s really volatile. You have to understand that even if Tesla profitably sells 300k units per year, it may still only be a $150 stock.

      At this point, the big growth in the stock price is done, and there’s plenty of upside and downside.

  2. David Murray says:

    I can respect Daimler’s decision since they are going to electrify their own cars. Toyota, on the other hand, is going to fall off of a cliff with their fool-cell approach.

    1. Lou Grinzo says:

      No, Toyota (and their partner in idiocy, Honda) won’t “fall off a cliff”. They will continue to bash EVs, push their ridiculous fuel cell vehicles, and generally try to convince the world that they’re smarter than every other car company on the planet. And they’ll continue on this path right up to the point where market conditions force them leap into the PHEV and EV business. When they do — and yes, it’s inevitable — they will try to convince the world that they invented PHEVs, EVs, batteries, cars, electric motors, and electrons.

      And only the people, like us, who follow this stuff closely will remember their sordid history of embracing and promoting fuel cells.

      1. sven says:

        “And only the people, like us, who follow this stuff closely will remember their sordid history of embracing and promoting fuel cells.”

        Are you saying that there is no downside to Toyota abandoning EVs now and planning on making EVs sometime in the future? In other words, Toyota is making a wise business decision and is crazy like a fox.

        1. Mike I says:

          Yes, there are many people who believe, myself included, that Toyota is quietly developing BEV technology. They feel that the balance of costs for a BEV do not make for an appealing product today, so they promote what they are selling today. When they have a battery that they can manufacture for a market acceptable price, they will be right there with product ready to sell. I’m sure the bean counters have properly calculated that FCEV is a cheaper path to compliance with CARB requirements. After all, they are getting governments to pay for fueling infrastructure.

          1. sven says:

            I agree that Toyota is working hard on a low cost battery. I think Tesla is going to skip making lithium-ion BEVs, and wait till they develop low cost all-solid-state batteries to start making BEVs. By that time, Toyota should also have its more efficient silicon carbide (SiC) power semiconductors ready for commercialization.

            http://bioage.typepad.com/.a/6a00d8341c4fbe53ef01a511cc6de9970c-popup

            http://www.greencarcongress.com/2014/06/20140612-toyota.html

            1. sven says:

              Toyota silicon carbide (SiC) power semiconductor link:

              http://www.greencarcongress.com/2014/05/20140520-sic.html

          2. sven says:

            Ironically, yesterday Toyota announced its joint-venture manufacturing company in China will begin making and selling BEVs in China next year under the Leahead brand.

            http://www.carnewschina.com/2014/10/19/toyota-to-launch-new-sub-brand-in-china-in-2015/

      2. Peter g says:

        How do you know Toyota won’t fall off a cliff?U.S. Camry sales seem to be holding up the whole company right now,

        1. sven says:

          Not according to Toyota’s US year-to-date sales figures. Camry sales are up only 5%, while Corolla sales are up 10.8%, Lexus car sales are up 17%, Toyota SUV sales are up 19.5%, Lexus SUV sales are up 14%.

          corporatenews.pressroom.toyota.com/releases/september+2014+sales+chart.htm

          1. Peter g says:

            Toyota’s 2 main markets are Japan and North America. Together they account for over 50% of sales. Sales in Japan are falling. Toyotas profits come almost exclusively from repatriating profits from North America.

            I could name Toyota brands whose sales are falling ( Prius, Yaris, Scion, Avalon & LS). Considering incoming competion sales of a few more models should start to fall. Leaving the refreshed Camry as it goes Toyota goes.

            1. Peter g says:

              BTW Camry sales are about twice Lexus’ s

              And the top selling Lexus the RX is about to meet Tesla Model X.

  3. Someone out there says:

    Considering that Tesla is late with everything they do, it’s probably a good time to sell off your pre-ipo stock now if you have a desire to.
    It will take many years still for Tesla to start making a profit. They haven’t managed to get the X out the door yet and then the 3 will probably be significantly delayed, it’s unlikely that Tesla will see profit before 2020.

    1. Big Solar says:

      2020 profit, thats pretty darn good if you ask me. ( I know, nobody asked)

    2. Lustuccc says:

      Musk is not interested in profit as much as providing good no emission cars to the world.
      Amazon do not make any profit, they re-invest in never ending opportunities…

      1. sven says:

        What exactly are you trying to say? Are you saying that Musk is not interested in profit, but is interested in increasing/maximizing share price like Amazon? Elon Musk owns a boatload of Tesla shares, just like Jeff Bezos owns a boatload of Amazon shares.

        1. sven says:

          Wall Street is getting tired of Amazon losing money. It’s stock is now down 27% in 2014. In contrast, Chinese company Alibaba, which overtook Amazon as the world’s largest e-commerce company last month based on market capitalization, makes healthy profits.

          http://money.cnn.com/2014/10/24/investing/amazon-bezos-stock/

          http://www.bloomberg.com/news/2014-10-24/amazon-ceo-bezos-faces-season-of-worsts-as-losses-mount.html

  4. Anon says:

    TMC is already late with Model X. And industry wide; everyone is expecting the crossover to be pushed back later into 2015.

    Probably a good time to sell stock, if their second product is going to market late, AGAIN.

    It won’t be super terrible if the delays are short, since the “D” AWD variations will prop (perhaps even increase) Model S sales for a time…

    But eventually, stock devaluation is typically how companies get ‘rewarded’ when they don’t have something new to sell and their promised product does not exist, and people get tired of waiting.

    1. scottf200 says:

      A lot of peoples view is the D Model S AWD in Dec just confirms how they have that major piece done for the Model X.

  5. taser54 says:

    For Toyota, Musk’s disparaging comments scuttled any future collaboration or investment.

    1. Get Real says:

      Really, Tesla Hater54. How about Toyota/Lexus’s many disparaging statements and ADDS disparaging plug-ins???

      You constantly snipe at Tesla and at the same time blatantly ignore the fact that Toyota is doing everything it can to undermine plug-ins.

      1. taser54 says:

        Personal attacks befit the little person you are.

        I have both praised and criticized Tesla.

        1. Get Real says:

          I have yet to detect any “praise” from you on Tesla, but their is certainly many negative comments from you against Tesla.

          1. Taser54 says:

            Then you are willfully ignorant. Take a break.

  6. Priusmaniac says:

    Pragmatically, Daimler and Toyota are out of Tesla, thus unable to do any potentially damageable internal actions. That is rather excellent news, the more if the shares have even increased on the news. Now Tesla is even more sole master onboard.
    As for what the Model X is concerned, even if it would come in 2016 or 2017, it would still not be late since the competition is not even close to putting one on the market in 2018.

  7. Assaf says:

    Given that,

    1. two distinct automaker investors pulled out in short order
    2. There’s reports that Daimler’s board representative was voted out, and last but not least
    3. Tesla’s fundamentals and prospects (regardless of some ridiculously misinformed comments above) continue to look spectacular –

    The most educated guess is that it’s Tesla who’s initiating these exits rather than vice versa.

    Perhaps they want to make sure they are 100% independent of other automakers in general, and BEV-dissing automakers in particular?

    1. sven says:

      “The most educated guess is that it’s Tesla who’s initiating these exits rather than vice versa.”

      How, pray tell, did Tesla make Toyota sell it’s shares? Enlighten us. A company has no say whatsoever about who owns its shares. The evil Big Oil companies and Koch brothers can buy as much Tesla stock as they want, and Tesla can’t do anything to stop them.

      Don’t let Tesla fanboyism cloud your objective “educated guess.” Saying that “it’s Tesla who’s initiating these exits rather than vice versa,” is just another crazy internet conspiracy theory with absolutely no basis in fact.

      1. Assaf says:

        sven,

        Your foul-mouthed stalking is growing old very, very fast, and is not compatible with the culture of this site.

        1. Scramjett says:

          Sven’s snide remarks aside, I am rather curious how Tesla can initiate these exits themselves. I was under the impression that, as Sven crudely pointed out, company’s have no control over who purchases stock. Are there some methods they can employ to influence holders to sell (either directly or indirectly)?

        2. sven says:

          Assaf,

          Your personal attack on me is a smokescreen to hide the fact that you can’t explain how Tesla is forcing Toyota to sell its shares, because its a blatantly false conspiracy theory. If you make comments on this site that are blatantly false, don’t be surprised when people call you out on it.

          I said nothing “foul-mouthed” in my comment. You’re delusional if you think saying “fanboyism” is foul-mouthed. You also claim that my critical comment “is not compatible with the culture of this site,” yet in your original comment you malign other posters by saying their comments are “ridiculously misinformed.” It sounds a lot like the pot calling the black.

          I’ll ask you once again. How did Tesla make Toyota sell it’s shares?

  8. taser54 says:

    Slightly OT: Many Tesla owners are mad at Tesla for not telling them about upcoming features and convincing them to buy a demo.

    http://www.sci-tech-today.com/news/Tesla-Buyers-Mad-over-New-Features/story.xhtml?story_id=120008XOTWRC

    Rolling changes rather than Model years are getting some Tesla owners steamed.

    1. Anon says:

      “Buyer’s Regret” isn’t uncommon in the tech world. People buy cell phones, then 6 months later, newer more feature laden (or bug fixed) one’s appear on the market. This happens all the time with products that have short revision cycles, to keep customers interested in their products.

      When you buy something as expensive as a Model S– most consumers are clearly happy with the product at the time it is CURRENTLY AVAILABLE. One does not buy into the future with such transactions, then automatically ASSUME they’ll never have to replace their vehicle to obtain newer tech / improved features or performance. That’s not capitalism, that’s some weird ‘buyer-lament-wish-fullfilling’ fantasy. Software updates for the lifespan of the vehicle are one thing, but expecting FREE HARDWARE UPDATES at Tesla’s expense– is a tad delusional. But hey, lawyers will represent anyone with money to burn and no sense not to spend it foolishly…

      Certainly, more Model S’s went on the used lot prematurely, since some of those folks, suffered from the “Gotta have the latest, AWD” fever in Norway, generated by the company’s announcement of their “D” variant. This was not unexpected.

      But most of those same folks, also knew about the upcoming Model X (which is AWD by default), and the eventual reuse of the platform as an upgrade for the Model S, to be used in later production. So, it’s not like anyone, anywhere, was caught off guard that Tesla’s been doing rolling updates to keep sales levels up. Not doing so, would doom the company, as they only have ONE product to sell at this time.

      It’s human nature to never be completely satisfied. *shrugs*

    2. mike w says:

      Tesla made the “D” announcement in October 2014 but the “D” model will not be produced until Feb. 2015 so they did advertise 4 months in advance of production.

      1. Anon says:

        I guess you forget that the very platform that Model S was built on, already had accommodations for a front motor mount in the back of the frunk– from the very beginning.

        Musk also spoke openly of giving ‘S’ an AWD option after work for it was done, back when the Model X was first introduced– two years ago.

        That’s loooong before anyone ever mentioned the “D” variant as a specific product. Only the name of it should be a surprise to anyone, and that hardly qualifies as the basis for a lawsuit. 😛

  9. Bill Howland says:

    Well, ‘prior sales excluded’ has been a typical company policy, so I don’t think its quite fair to blame Tesla for this, the same way as I cannot in all fairness ‘blame’ chevy for a 2011 volt that only goes 90% as far as a 2015 volt. The car does what I agreed to almost 4 years ago, and I should be satisfied with that (which I am).

    As would be certainly expected, Tesla is getting a bit of competition. This is no doubt going to affect future list prices of certain models, since, while having the market to themselves at one time, individuals and gov’ts can now make a judicious choice, as the recent purchase of taxis from BYD indicates, and as was said, the model S was briefly considered but was deemed ‘too expensive’.

    THis has to at least increase Musk’s ‘collar temperature’ a bit.

    Car companies banking on hydrogen fuel-celled vehicles are making, in my opinion, a huge stategic error. There is no clamoring seen for FCV’s in either electricity starved Japan, nor California, regardless of whatever CARB says publicly.

    Anyone who has ever viewed “Who Killed the Electric Car?”, walked away seeing almost for a certainty CARB is a corrupt organization, and the declaration the H2 are now ‘three times as green’ as battery-electrics makes one skeptical as to whether this was a totally unbiased analysis.

    Unless forced or incentivized by gov’ts, I really don’t see John Q. Public buying FCV’s since to date, there is no economic benefit by doing so.

    At least with EV’s in most of the states, the fueling is cheap, and easy (at least 90% takes place at home).

    1. Scramjett says:

      First point: I think most people’s ire over the feature change is that Tesla doesn’t identify its cars by model year which makes the Model S as hard as a smart phone to predict when new features will come out. In the automotive world, you could just wait for the next Model Year but Tesla looks to be doing away with that and people don’t like the uncertainty that goes with it.

      Second Point: ARB: I worked there for 7 years and I wouldn’t characterize it as “corrupt.” ARB has been traditionally an agency based on science and engineering but, like many similar such US government agencies, has been undergoing politicization over the last few years.

      It used to be that you’d have scientists or engineers in the upper levels of the agency and sitting on the board (and would be appointed based on a recommendation made to the governor or one of his advisers). These days, like running for political office, appointees are “vetted” by requiring endorsements from other sitting politicians and, in many cases, industry (I was floored when I heard that one). After the board had mostly politicians (I think Dan Sperling is the only non-politician right now), it was only a matter of time before upper management had most of it’s scientists/engineers eliminated (mostly through attrition, but there have been a few cases of political “coups” against managers). I suspect similar situations have gone on with other agencies such as the DOE, Federal EPA, and many other traditionally scientific agencies. It’s really disturbing to see policy dictate science rather than the way it should be: science dictating policy.

      Final Point: I agree with your assertion that fuel cells are not the way to go and the general public is unlikely to buy into them. I mean, Toyota’s FCV is the same price as a Model S 60 but the big difference is that the Model S 60 has a 0-60 time of 5.6 seconds, whereas the Toyota FCV goes from 0-60 in a pathetic 11 seconds (slightly worse than even the Prius). That and the Tesla has far more luxury features than the Toyota will have I’d wager. Who the hell is going to drop $70k on an gussied up Corolla whose only feature is a fuel cell that can be refueled in exactly 28 locations (once the stations are built that is)? Not me!

      I know a number of scientists/engineers who have privately told me that they don’t think the numbers add up for fuel cells. Having looked at the numbers myself, I would agree totally. I don’t think the engineers at any agency (or even Toyota) are necessarily to blame. I think the politicians/corporate executives are to blame. They have this policy agenda and they are pursuing it, science and engineering be damned.

      1. Bill Howland says:

        I saw the movie, and I calls ’em as I sees ’em.

      2. Phr3d says:

        RE politicization of (what should be) engineering-background-dependent appointments,
        well put and thanks

      3. Numb The Pain says:

        Scramjett – A couple of corrections!

        Dan Sperling, who you’re calling out specifically as a scientist at ARB is actually quite supportive of FCEVs.

        The Toyota FCEV (Mirai) takes 9 second to go from 0-60: http://www.greencarcongress.com/2014/11/20141118-mirai.html

        Finally, the car costs $57,500, not $70K.

  10. Bloggin says:

    With the releasing of two part owners/investors, Tesla Motors is now positioned for a planned merger with a major global automaker.

    I expect to hear an announcement very soon, as Daimler and Toyota had to quickly get out of the way.

    1. Josh says:

      Who would you suspect that automaker to be? Obviously not Toyota or Diamler. I had thought Toyota’s backup EV plan was just to buy Tesla, that isn’t looking likely now.

      Big Global OEMs that would be left:

      VW – Seems unlikely since the already have Audi and Porsche
      BMW – really? they already invested in another production technology and the “i” line.
      Fiat/Chrysler – Wow, that would be a real shocker. A complete about face.
      Ford – Eh, maybe, Lincoln doesn’t have much cache anymore. Tesla would give them a competitive high end line.
      GM – I really doubt it, they have significant investments in their own tech and seemly joined at the battery hip with LG Chem.
      Nissan/Renault – Really hard to see that happening because of all their internal work already.
      Honda – ?!? This would be a shocker also. They bought ZEV credits from Tesla. It is just hard to see them changing gears all of a sudden.

      1. Scramjett says:

        How about Mazda or Mitsubishi?

        Mazda has no EV/PHEV/HEV to speak of and have been relying exclusively on engine improvements (which will, at some point, hit the limit). Buying someone like Tesla would get them into the luxury market and EV market at the same time.

        Mitsubishi could be another option, but not necessarily as likely given their own EV investments and the success they are seeing with the Outlander PHEV.

        Any others that might work? (I certainly hope it’s not a Chinese manufacturer!)

        1. Scramjett says:

          The only downside I can see is that neither company may have the capital necessary to merge with Tesla, though they could potentially buy some decent sized stakes.

        2. Josh says:

          I guess I did leave Mazda off the list. I think they are too small to do the deal.

          Mitsubishi might actually be able to come up with the money, but they are having their own plug-in success with the Outlander right now.

        3. sven says:

          Actually, Mazda will soon start making a diesel-hybrid for Japan and Europe. They are also working on a PHEV/EREV that uses a Wankel rotary engine as a range extender.

          http://green.autoblog.com/2014/08/14/will-mazda-sell-diesel-hybrids-in-japan-in-2016/

          http://www.autoblog.com/2013/12/23/mazda2-extended-range-rotary-ev/

      2. Peter g says:

        I wouldn’t knock GM or Honda off the list so fast. I would add Panasonic’s battery unit to that list for obvious reasons.

        Tesla needs manufacturing GM has 2 plants slated for closure (Australia and Germany) GM may even pay Tesla to take these facilities off it’s hands.

        Because of recent recalls Honda stock price is dropping and Tesla may be in a position to buy them outright.

    2. Alonso Perez says:

      No way Musk is selling. People who think Tesla is for sale do not understand, and don’t listen, what the man himself has stated with absolute clarity and consistency for years.

      Tesla will stay independent till EVs are totally inevitable. We are years away from that yet.

      That, plus there is the practical problem of valuation. It’s an expensive company.

  11. EVer says:

    toyota sucks

  12. Savage J says:

    Just remember folks, as much as we are convinced that EV’s are the way forward, Toyota is used to everyone laughing at them. The Prius was supposed to be a fool’s errand and look how that turned out. Unfortunately I don’t know why they have not chosen to capitalise on all that know-how they accumulated before everyone else.

  13. CherylG's_DirtyLittleSecret says:

    I know why they exited Tesla.
    NADA and their crooked politicians pressured them to. Made no sense to have stake and support for the competition…..lol

    1. CherylG's_DirtyLittleSecret says:

      Or Vice Versa….the other way around.

      Tesla pressured them to exit so NADA and their crooked politicians can’t say “Hey, you’re partly owned by Daimler and Toyota, you have to sell through dealerships!”

      Either way, I think it benefits Tesla.