Toyota and Tesla Working on $1 Billion Deal?

Tesla wasn't "supposed" to survive this long. Starting a new independent automaker is a difficult, and near impossible task. So far, Tesla has done it though. Tesla has had the advantage of major private financial backing, $465 million in Department of Energy loans, a successful Initial Public Offering and a few partnerships with large manufacturers along the way.

One of which was with Daimler for an electric smart car - that included Daimler taking a 10% stake in the company reportedly valued at $50 million. Last year Toyota and Tesla began a partnership of their own. Tesla purchased Toyota's NUMMI factory in Freemont, California, for production of the Model S sedan.

As part of the deal, Toyota took a similar stake as Daimler, valued at $100 million. Speculation began about a possible purchase down the road, or a much deeper level of collaboration. Toyota and Tesla seemed like a perfect fit, and the RAV4 EV sprung from the two working together.

Now, Tesla's Chief Executive Officer Elon Musk is saying there is indeed a huge deal in the works. While Musk declined to give a number, saying "an order of magnitude" larger than the one that preceded it, a Tesla official later put a number on it - $1 billion.

The deal would ensure Tesla has a large partner for its efforts in the future, as well as giving Toyota an edge. While a pioneer in the mass production of hybrids, Toyota has fallen behind with producing all-electric vehicles. Tesla is a way to fix that.

The Model S hasn't launched yet, but it looks like it will be a success for the company based on interest and orders. The Model S is part of Tesla's plan to quickly move down the ladder on price. While much cheaper than the $100,000 + Roadster, the Model S still is firmly in the luxury segment. The next car is intended to come in at around $25,000. To reach that price point, Tesla will likely need an established partner. Could Toyota be the one? Stay tuned.