Tesla's all-electric Roadster Sport.

Tesla’s all-electric Roadster Sport.

The undisputed hybrid king, Toyota, says it is teaming  up with Tesla Motors in the development of electric cars that run solely on lithium-ion batteries. As part of the deal, Toyota purchased $50 million of Tesla common stock.

Using similar technology already used in Tesla’s Roadster model, the new model will be expected to have a range of at least 200 miles on a single charge. The model will seat up to seven people and will be fully highway capable, getting up to speeds of 60 mph in just 5.6 seconds.

The Tesla Roadster was the first production car to use lithium-ion batteries and can accelerate from 0-60 mph in a mere 3.9 seconds.

“I sensed the great potential of Tesla’s technology and was impressed by its dedication to monozukuri (Toyota’s approach to manufacturing),” says 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.”

A prototype of the car might be ready for testing as early as this year. The prototype is based on a current Toyota model that uses Tesla’s lithium-ion battery system.