Toyota has informed that it is planning to invest 50 million dollars in US electric car firm Tesla Motors. Both Toyota and Tesla Motors have declared to build electric vehicles soon. Tesla has only production of 15 cars per week and has only 500 employees where Toyota is the largest carmaker in the world.

This agreement will give the Japanese company around 2.5% stake in Tesla Motors, which will make the new saloon model in the Toyota factory in San Francisco.

Tesla Motors started operations in the year 2003 so it will have a big benefit to work with experienced and skillful company Toyota, after this deal.

The new company will be benefited from the mass production skills of Toyota. On the other hand, Toyota will able to use the strong electric batteries of Tesla. This deal might help the Japanese auto major to rebuild the reputation of Toyota in US.

It had faced huge criticism for its problems over faulty breaking systems and accelerator pedals. Chief executive of Tesla has said that the agreement as a gesture of support from the Japanese company Toyota.