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Toyota and Tesla: Is the Romance Over for Good?

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Probably not.

Back in the day, Toyota and Tesla used to be like this (you can’t see us, but we have our fingers crossed as we type, which isn’t the easiest thing to do). The two automakers used to have a deal where EV giants Tesla provided Toyota with the batteries to make its RAV4 EV. But earlier this year, Toyota made the decision to move away from electric vehicle technology and towards hydrogen fuel cell technology, although the Japanese automaker still owned an estimated 2.5% stake in Tesla.

Toyota and Tesla part ways

Toyota and Tesla could be parting ways, as the RAV4 EV is discontinued and Toyota sells its Tesla stock

Last week, Daimler, which owned an impressive 10% of Tesla Motors, announced it was selling its stock (and made quite a healthy profit along the way). Now, Toyota is following suit and jumping ship, possibly due to sinking Tesla stock prices in recent weeks. In a little over a month, the shares have lost $44 each, so the two automakers cutting their losses is likely due to them not wanting to risk losing any more. Tesla shares have been inflated for quite some time, so it’s only natural that they will drop in price; however, that means that those who bought when the price was low can make quite a tidy profit if they sell before Tesla stocks dip much more.

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The two automakers selling their stock in Tesla doesn’t mean that any future collaborations are off the table. Tesla Motors CEO Elon Musk hinted at a new deal between Toyota and Tesla that could result in new plug-in car technology, while Daimler has stated that it plans to continue doing business with Tesla, which currently supplies the battery packs for the 2015 Mercedes-Benz B-Class Electric.

Whether any additional automakers will decide to invest in Tesla is still unknown, especially since Tesla hasn’t been well-received among traditional carmakers in the US. Lobbyists across the country have been actively trying to ban the sales of Tesla vehicles in various states due to the automaker’s model of selling directly to the customer rather than via a dealer (the most recent state being Michigan).

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