Toyota to end supply deal with Tesla early

|About: Tesla Motors (TSLA)|By:, SA News Editor

Tesla Motors' (TSLA) deal to supply Toyota (TM) with battery packs and motors for the latter's rechargeable RAV4 electric crossover vehicle will terminate in 2014, the U.S. company has said, as the Japanese firm is "expected to end" the current model this year.

Toyota, which owns 2.4% in Tesla, had said in May 2012 that it would purchase parts for 2,600 electric RAV4 EVs over three years in a deal that was initially expected to be worth up to $100M.

However, Toyota has sold a mere 1,594 RAV4 EVs since 2012 through April. In Q1, Tesla earned $15.1M from the agreement.

Separately, Toyota intends to boost the production of its Camry sedan at its Kentucky plant by 100,000 units after it stops outsourcing some of the production to Fuji Heavy Industries' (FUJHF) facility in Lafayette in Indiana. Fuji could produce a new SUV in Lafayette when the Camry contract ends.