PALO ALTO, CA- Tesla Motors, Inc. and Toyota Motor Corporation (TMC) announced they intend to cooperate on the development of electric vehicles, parts, and production system, and engineering support.

The two companies intend to form a team of specialists to further those efforts. TMC has agreed to purchase $50 million of Tesla's common stock issued in a private placement to close immediately subsequent to the closing of Tesla's currently planned initial public offering, according to TMC.

"I sensed the great potential of Tesla's technology and was impressed by its dedication to monozukuri (Toyota's approach to manufacturing)," said TMC President Akio Toyoda. "Through this partnership, by working together with a venture business such as Tesla, Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has. Decades ago, Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that 'venture business spirit,' and take on the challenges of the future."

"Toyota is a company founded on innovation, quality, and commitment to sustainable mobility. It is an honor and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla," said Tesla CEO and Co-founder Elon Musk.

TMC introduced the first-generation Prius hybrid vehicle in 1997 and produced approximately 2.5 million hybrids in the twelve years since. In late 2009, TMC started lease of Prius plug-in hybrids, which can be charged using an external power source such as a household electric outlet. The company also plans to introduce electric vehicles into the market by 2012.

Tesla designs and manufactures EVs and EV powertrain components and is currently the only automaker in the U.S. that builds and sells highway-capable EVs in serial production.