NAGOYA -- Toyota Motor has terminated its business and capital partnership with U.S. electric car maker Tesla, The Nikkei learned on Saturday.
Going forward, the leading Japanese automaker will try to speed up its development of electric cars by consolidating the technologies of affiliated parts makers at a unit launched late last year.
Toyota is said to lag its rivals in electric vehicle development.
Toyota in 2010 paid $50 million for about a 3% stake in Tesla. Around the same time, it paid $42 million for part of the site of a joint venture it once had with General Motors, thinking the old plant could be updated and used for producing electric cars.
In 2012, Toyota released the RAV4 EV, an SUV, with Tesla-made batteries.
But the partnership was short-lived. Toyota stopped sourcing lithium-ion secondary batteries from Tesla in 2014. There has been virtually no collaboration between Toyota and Tesla since 2015, according to a Toyota representative.
As of March 2016, Toyota held about 2.34 million Tesla shares, which meant it owned more than 1% of the California company. By the end of last year, Toyota had sold all of its Tesla shares.
Toyota had been counting on fuel cell vehicles to carry the exhaust-free car industry forward. The automaker released the Mirai, the world's first production fuel cell vehicle, in 2014.
Meanwhile, Toyota has conducted trials of the i-Road, a single-seat electric vehicle, but doubts it can be mass produced due to the car's limited range and the amount of time necessary to charge its batteries.
Toyota is in a bit of a pickle. California is strengthening its CO2 emission controls, and China, the world's largest car market, is beefing up subsidies for electric vehicles. Toyota pioneered and is a leader in hybrid vehicles, but these cars no longer receive favorable treatment in the U.S. and China. The situation now has Toyota rushing to catch up in electric cars.
British research company HIS Automotive estimates that the global electric car market will increase tenfold from 2015 to around 3.7 million units by 2025.