Tesla and Toyota Team Up in a $60 Million Electric RAV4 Deal

Tesla Motors (TSLA) has signed a $60 million contract with Toyota Motor (TM) to develop an all-electric version of the popular RAV4 compact sports-utility vehicle, Tesla said Wednesday.

Toyota and Tesla agreed to the $60 million contract on Oct. 6, Tesla disclosed in a regulatory filing with the Securities and Exchange Commission. The agreement calls for Tesla to develop the battery, power electronics module, motor, gearbox and software for the RAV4 (current gasoline models pictured), the filing said.

The companies disclosed plans in July to begin working together to develop the vehicle, prototypes of which Tesla expects to deliver to Toyota later this year. The Japanese carmaker plans to begin selling all-electric RAV4 models in 2012. This formal pact followed Toyota's announcement in May that it would invest $50 million in the electric sportscar maker.

Tesla CEO Elon Musk told Reuters late last month that Tesla would serve as a key supplier to Toyota on the RAV4 project.

Musk told the news agency it was possible that the first thousand electric RAV4s could be produced at the former New United Motor Manufacturing (NUMMI) plant in Fremont, Calif., which was previously operated under a joint venture between Toyota and General Motors, until GM filed for bankruptcy last year.

Telsa's disclosure followed reports earlier this week that GM's Chevrolet Volt electric car, scheduled to hit dealer showrooms in a matter of weeks, will sometimes rely on its gasoline engine to power the vehicle under heavy acceleration or during high speeds and thus isn't a true electric vehicle.

A blogger at online car-buying guide Edmunds.com went so far as to say GM "lied" in calling the Volt a "no comprises electric package."

In response, GM said Tuesday it didn't disclose the technical details about the Volt "because the information was competitive and we awaited patent approvals."