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Toyota to pay Tesla $60 million to electrify RAV4

Tesla has entered into a $60 million agreement to develop a powertrain system for the electrified Toyota RAV4, which is slated to go on sale in 2012.

The agreement, disclosed in an SEC filing, covers the development of a battery, power electronics module, motor, gearbox and software that will be used in the electric RAV4, which is planned to go on sale in 2012 and will be showcased at the Los Angeles Auto Show this November. Toyota also plans to sell the Prius plug-in hybrid around May or June of 2012.

Bloomberg reports this agreement only covers Tesla’s research and development, not the components that would be supplied for the cars.

The companies entered into an agreement to start developing an electric powertrain system for the RAV4 in July. The announcement today marks a first major step in the project. Toyota announced in May it would take a $50 million stake in Tesla, a deal that closed after the company’s IPO at the end of June.

Toyota and Tesla have 60 days to iron out the details of the agreement, including specifications, payment amounts and schedule, and a delivery timeline.

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