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Toyota-Tesla Deal Adds Spark to Electric Car Industry

The Roadster Sport, an electric vehicle built by startup Tesla Motors, begins to redefine what electric cars might look like. (Image credit: Tesla Motors)

In a move that may provide a spark for the electric automobile industry, Toyota, the world's largest automaker, is teaming up Tesla Motors Inc, the makers of the only highway-legal all-electric car in the United States.

The companies announced a deal yesterday in which Tesla will buy a defunct Toyota plant in California where it will produce the model S, an electric sedan slated for 2012.

Toyota, meanwhile, will buy $50 million worth of Tesla stock, and the two companies announced Thursday that they will work together to develop new electric vehicle technologies and refine manufacturing methods.

In this symbiotic business deal, Tesla will likely benefit from direct knowledge of Toyota's economy of scale and links to a vast supplier base.

Toyota, for its part, might get a boost in its competition with other carmakers over the growing environmentally friendly vehicle marketplace. Tesla's advanced lithium-ion batteries, for example, might steer the way for Toyota as the Japanese automaker looks to replace the older nickel-metal hydride units found in its hybrid Prius.

The news of the deal might add bit of much-needed polish to Toyota's public image, which has been battered by the ongoing brouhaha and recalls regarding unintended accelerations that have been implicated in motorists' deaths.

Electric company

Tesla Motors, based in California, is the brainchild of Elon Musk, a co-founder of SpaceX, which is developing a new breed of commercial space rockets.

Electric cars like those made by Tesla aren’t just "green." They can accelerate more quickly than conventional vehicles because 100 percent of the torque is applied instantly to the wheels. The Tesla Roadster goes zero to 60 in a not-too-shabby 3.9 seconds.

Though the two-seater Roadster is the only all-electric vehicle on U.S. highways today – and there are only about one thousand of these $109,000 sports cars in the entire world – the domestic marketplace for electric cars is heating up.

Chevrolet is set to finally roll out its plug-in hybrid Volt in California this fall, and Nissan's all-electric Leaf will soon be hitting the streets as well.

A slew of federal grants and incentives from the Department of Energy reflect the Obama administration's stated goal of having one million plug-in hybrids and electric cars cruising on U.S. roads by 2015.

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Adam Hadhazy is a contributing writer for Live Science and He often writes about physics, psychology, animal behavior and story topics in general that explore the blurring line between today's science fiction and tomorrow's science fact. Adam has a Master of Arts degree from the Arthur L. Carter Journalism Institute at New York University and a Bachelor of Arts degree from Boston College. When not squeezing in reruns of Star Trek, Adam likes hurling a Frisbee or dining on spicy food. You can check out more of his work at