Toyota recalls all RAV-4 EVs made with Tesla due to problems with Tesla’s powertrain

“In a complete loss of drive power, which can increase the risk of a crash.”

The DailyKanban usually doesn’t write about recalls, except in the morning roundup, and except in special circumstances. This is one of them. Toyota recalls all 2,500 RAV4 EVs built with Tesla for problems in the propulsion system supplied by Tesla.

According to a company statement, “components in the Electric Vehicle Traction Motor Assembly, which is part of the propulsion system, may cause the vehicle to shift to “neutral” due to a software issue … If the vehicle shifts to “neutral”, this will result in a complete loss of drive power, which can increase the risk of a crash.”

The recall either was no surprise to Tesla, or it wrote with a healthy dose of clairvoyance in its recent 10-K, filed in February:

“If our vehicles or vehicles that contain our powertrains fail to perform as expected, or if we suffer product recalls, our ability to develop, market and sell our electric vehicles could be harmed.

Our vehicles or vehicles that contain our powertrains such as the Toyota RAV4 EV or the Mercedes-Benz B-Class EV may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. For example, our vehicles are highly dependent on software to operate. Software products are inherently complex and often contain defects and errors when first introduced, and changes to software may have unexpected effects…”

The 2,500 RAV-4 EVs were built as a compliance car project, using Toyota’s RAV-4 and Tesla’s electric powertrain. During the project, we heard grumblings about Tesla’s unconventional approach to specifications and quality assurance. Some Toyota engineers commented – privately – unfavorably about the cooperation. One source close to the matter described the procedures as “Silicon Valley garage engineering.”

Last October, the DailyKanban broke the story that Toyota had quietly disposed of a chunk of its approximately 3 million shares it had acquired in 2010 before Tesla went public. At the time, we heard that Toyota had sold approximately one third of its $TSLA stock for a tidy profit. It is likely that Toyota sold more after that date. Toyota’s exact engagement in Tesla Motors should be known once Toyota publishes its annual report after the fiscal closes on March 31.

A Tokyo-based spokesman of Toyota politely declined comment, citing corporate policy not to talk about suppliers in case of a recall. The DailyKanban did not reach out to Tesla. We don’t talk to OEMs once they rudely demand an article takedown.

In commenting on the story, Bloomberg recounted that Tesla’s Elon Musk was much less courteous when it came to OEM-and-supplier relations. Musk called Toyota’s fuel-cell project “extremely silly,” and he spoke of “fool cells.”

Toyota invested $50 million into the company, which were converted into shares. Most of the money was used by Tesla to lease Toyota’s abandoned NUMMI plant. Last year, Daimler also sold its shares in Tesla. Daimler’s deal with Tesla was a know-how exchange, and Daimler apparently decided it had seen and heard enough.

Cue the comments of the Muskovites that it’s all a big conspiracy, and that Big Oil and Oki Hydrogen are all out to get the little guy.