Musk: 'Significant' Tesla, Toyota Development Deal Could Happen by 2017

Sep 09, 2014 12:50 PM EDT | Matt Mercuro

Tesla and Toyota have had a rocky relationship for a long time, but the two are apparently now on "very good terms," lately and might be talking about a new joint project in the electric vehicle segment.

Tesla CEO Elon Musk isn't shy about revealing future plans for the automaker, but rarely provides specific details too early for those plans, as was the case with his Tesla/Toyota deal comment made during a press conference in Tokyo.

The two automakers just finished a project which Tesla provided motors, power electronics, and batteries for the second-generation Toyota RAV4 EV, of which just 2,000 were made.

Rumors have circulated that the two companies were at odds over engineering procedures and personnel, and Musk himself recently used the term "fool cells" in reference to hydrogen fuel-cell electric vehicles, which Toyota is creating in favor of battery-dependent plug-in EVs.

"If you look out maybe two or three years from now, I would not be surprised if there was a significant deal with Toyota and Tesla," said Musk to reporters in Tokyo.

Such a deal would be bigger than the $100-million RAV4 project, according to Bloomberg News.

Toyota has not commented yet regarding Musk's remarks, though the company has plenty of reasons to help Tesla grow. The automaker invested $50 million in Tesla back in 2010, which is valued at nearly $750 million today thanks to Tesla's stock price. News like this will surely help the EV maker's stock as well.

The two companies could work together in the future on battery systems, especially since Tesla is planning to build at least one battery manufacturing plant, or "gigafactory," as Musk calls it.

Tesla announced last week that the first "gigafactory" will be built in Reno, Nevada.

Toyota also needs batteries for some of its successful hybrid vehicles and its upcoming fuel-cell vehicles, which require small lithium-ion storage batteries. 

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