Toyota Motor Corp. (TMC) has agreed to purchase Rs.230.89 crore ($50 million) of Tesla Motor Inc.'s common stock as a part of an agreement to develop electric vehicles, parts, and production system and engineering support.

The companies plan to form a specialist team to further those efforts. TMC has agreed to purchase Tesla's common stock issued in a private placement to close immediately subsequent to the closing of Tesla's currently planned initial public offering.

"I've felt an infinite possibility about Tesla's technology and 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 honour and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla," said Tesla CEO and cofounder Elon Musk. "We look forward to learning and benefiting from Toyota's legendary engineering, manufacturing and production expertise."

TMC introduced the first-generation Prius hybrid vehicle in 1997, and produced approximately 25 lakh (2.5 million) hybrids in the twelve years since. Late last year, 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's goal is to produce increasingly affordable electric cars to mainstream buyers—relentlessly driving down the cost of electric vehicles. Palo Alto, CA-based Tesla has delivered more than 1000 Roadsters to customers in North America, Europe and Asia. Tesla designs and manufactures electric vehicles and electric vehicle powertrain components.