Why Toyota Sold All Its Tesla Stock

By Douglas A. McIntyre Updated Jan 12, 11:24AM EST · Published Jun 3, 8:25AM EDT

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Why Toyota Sold All Its Tesla Stock — © courtesy of Tesla Motors

The electronic vehicles (EV) joint venture between one of the world’s largest cars companies and one of its most advanced has ended. Toyota Motor Corp. (NYSE: TM) sold its entire block of Tesla Inc. (NASDAQ: TSLA) shares as the Japanese manufacturer charts its own course in the EV world.

According to Automotive News:

Toyota Motor Corp. said on Saturday it had sold all shares in Tesla Inc. by the end of 2016, having cancelled its tie-up with the U.S. automaker to jointly develop electric vehicles.

Japan’s biggest automaker acquired around a 3 percent stake in the Palo Alto-based automaker for $50 million.

Toyota spokesman Ryo Sakai said the company had sold all of its shares in Tesla as of the end of 2016, part of a regular, periodic review of its investments, after it had initially sold down a portion in 2014.

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For the most part, until two years ago, the electric car company business was a game of follow the leader. That leader was Tesla. Its cars were admired worldwide for their advanced technology and flawless quality. Since then, every large car company, and many smaller ones, have elected to pursue electric car projects of their own. Several have even launched direct competitors to Tesla vehicles, including General Motors Co.’s (NYSE: GM) Chevy Bolt, which the manufacturer sells for about $36,000.

According to CleanTechnica, electric car sales are rising quickly in the United States, up 74% in the first quarter to nearly 25,000. Tesla’s Model S and Model X were the top-selling cars in that period.

Tesla also has shown other car companies the high level of investor enthusiasm for these products. The company’s market cap it $56 billion, compared to Ford Motor Co.’s (NYSE: F) at $45 billion and GM’s at $52 billion. Tesla shares are up 54% in the past year. At least Toyota probably made money on its sale.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.