TodayApril 16, 2022

2013 Toyota RAV4 EV with Bill Fay

Toyota owns 3.6% stake in Tesla

Bill Fay, VP, General Manager, Toyota Motor Sales, U.S.A., talked to Lou Ann Hammond, CEO,, about the old and new Toyota RAV4 EVs, and about the strategy of partnering with Tesla to create this generation Toyota RAV4 EV.

In the ’70s Toyota created a Chinook. The Chinook was basically a Toyota pickup with a pop-up camper on the back. The internal nickname of the car was the pig.

While talking to the press about the Toyota RAV4 EV Sheldon Brown, from the Toyota Technical Center, referred to the RAV4 as the elephant. While the euphemism was probably a Freudian slip there are many questions – the elephant – in the room when it comes to the RAV4 EV and the partnership between Tesla and Toyota.

Dr. Phil, the TV psychologist is known for his compassionate, yet hard-nosed no-nonsense approach to people that sit in front of his proverbial camera couch. If you watch the show enough you know Dr. Phil’s mission, what he asks all of his guests, is “What are you getting out of this?” It’s the same question I would ask Toyota.

Toyota bought $50 million worth of stock in a private placement, giving the Japanese automaker a 3.6% stake in Tesla.

I see what Tesla is getting out of this. Tesla entered into a $465.0 million long-term loan under the United States Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program which will be used to finance the development of a planned integrated manufacturing facility for the Model S as well as Tesla’s electric powertrain production facility.

Tesla has also been granted up to approximately $31 million in tax incentives by the California Alternative Energy and Advanced Transportation Financing Authority.

According to a person that works at the California Air Resources Board (CARB) Tesla receives money from other manufacturers that are not meeting the requirements of the ZEV program, a sort of ZEV cap and trade program. For example, because Honda doesn’t want to make as many ZEV vehicles as required Honda buys credit’s from Tesla. But according to William Fay, Toyota doesn’t need ZEV credits.

There is something that Aikio Toyoda sees in Tesla Corporation. Is it the skunkworks type of atmosphere he was hoping to get when Scion was started? Scion is a full-fledged company with its own layers of bureaucracy. Is Toyoda testing the waters to see if Tesla would be a good buy?

Gregory D. Bernas is Chief Engineer in the Product Development Office (PDO) Department of Toyota Technical Center (TTC), USA, Inc., likened working with Tesla as a skunkworks, creating a car on the fly, literally. There would be Tesla software engineers in the back of the car, and each time there was an issue with the way the car handled the software engineer would rework a piece of script, refresh and Toyota would drive the car again.

The Toyota RAV4EV is the first SUV electric vehicle (EV) on the market. It’s an interesting strategic move for both Toyota and Tesla. Toyota gets bragging rights for having a great SUV EV out of the block first. Toyota will sell the first EV SUV with Tesla’s S model 845.5 pound powertrain. Toyota said they did not have a powertrain that they could put in the RAV4 EV that was as powerful as Tesla. Tesla says they will be bringing an SUV EV to market in 2014.

If all the reviews are great for Toyota’s SUV EV, it gives Tesla a head start on their marketing campaign when Tesla’s SUV EV comes out.

The elephant is still standing in the middle of the room, scratching its ear.

Lou Ann Hammond

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a founding member of the Women's World Car of the Year #WWCOTY, and board member of the Women in Automotive.