Toyota’s Tesla Nasdaq Departure: What Does It Mean For The Car Shopper?

Stock market news authority Nasdaq reported yesterday that Toyota has officially sold off 100 percent of the shares it held in Tesla Motors (NASDAQ:TSLA), and by doing so, has severed the partnership between the two automakers. This is going to have a huge impact on the electric car industry in the coming years, although not in the way you might think.

When Toyota bought $50 million worth of Tesla stock in 2010, it was huge news. The Japanese auto manufacturer is one of the largest and most respected in the world, and the fact it was hedging such a huge sum of money on the futuristic electric car technologies Tesla was developing was a very big deal. With Toyota’s credibility behind it, who would be able to stop the comparably little-known California auto startup?

The answer is that no one stopped them. In fact, electric car sales took off after Toyota and Tesla collaborated to put out the popular Rav 4 EV during 2011 and 2012, and almost every auto manufacturer in the industry caught on to the trend Tesla and Toyota had started. Sales continue to rise even today — Clean Technica reports electric car sales went up 74 percent in just the first quarter of 2017 — and there really is no turning back at this point.

From left, Toyota USA president Jim Lentz, Tesla president Elon Musk, Toyota chief engineer Greg Bernas, and Toyota Technical Center director Shigeki Terashi pose with the Rav 4 EV. [Image by Reed Saxon/AP Images]

There was no big falling out between Toyota and Tesla to cause their split, though. Instead, it seems that Toyota finished work with Tesla years ago and then developed its own line of electric cars, eliminating the need to work with Tesla any longer.

“Our development partnership with Tesla ended a while ago,” said Toyota spokesman Ryo Sakai. “Since there have not been any new developments on that front, we decided it was time to sell the remaining stake.”

Though the Nasdaq withdrawal is just being reported now, writes Market Exclusive, Sakai continues that Toyota had actually sold all its Tesla shares at the end of 2016 as “part of a regular, periodic review of its investments.”

It was also in late 2016 — November, to be exact — that Toyota established a dedicated division to oversee the production of electric cars. Presumably, manufacturing their own line while still working with Tesla would violate a conflict of interest agreement, hence the split.

At this point, notes Smart Stock News, Tesla is off the ground anyway. It may have benefited greatly from having an industry behemoth like Toyota back it as it took flight, but it has since spread its wings and can more than likely soar on its own. The company’s products are increasing in popularity all over the world, and, as mentioned, demand for electric cars is booming globally. India may be one of it’s biggest customers; according to CNN, the country just announced it will sell only electric cars by 2030.

[Image by Justin Sullivan/Getty Images]

So, contrary to what one might think, the parting of ways between Tesla and Toyota will not damage the electric car industry — it will diversify it. Tesla will, of course, continue making electric cars, and perhaps it will return to the more premium style of modern luxury models that it was known for before ever teaming up with Toyota.

Toyota, on the other hand, will crank out its own models likely to lean towards the economic designs seen in most of its more traditional cars.

Toyota will also be dabbling is something much less traditional, as Forbes reports Toyota recently invested a hefty sum in a Japanese flying car company called Cartivator Resource Management.

At the end of the day, the Tesla-Toyota split means that electric car buyers will have more choice than ever when shopping for a new ride, which is, of course, a good thing.

[Featured Image by Justin Sullivan/Getty Images]

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