NEW YORK (CNNMoney.com) -- Electric carmaker Tesla Motors will deliver two prototypes to Toyota Motor Co. by the end of the month, a Tesla executive said Saturday.
The prototypes will use Tesla's electric motors and battery packs and the bodies of Toyota vehicles.
"Toyota and Tesla engineering teams have made a lot of progress in a short amount of time and it is exciting to start seeing some initial results," Tesla Chief Technology Officer JB Straubel said in a statement.
Toyota announced in May that it planned to invest $50 million in Tesla Motors (TSLA) following the electric car maker's initial public offering, which took place on June 29. Tesla's stock closed Friday at $17.40, down 21% over five days.
Toyota, which is already the industry leader in gas-electric hybrid cars, is also looking for other partners to develop future alternative fuel technologies. In fact, collaboration with other companies is expected to be a key part of Toyota's alternative fuel strategy.
Toyota executives have, in the past, expressed doubts about the market potential for purely electric cars. They have citing the vehicles' high cost, relatively short driving distance, long charging times and questionable battery technology.
Last year, Toyota (TM) revealed a concept version of a tiny electric "city car" with a 40 mile range. That car is under development, Toyota said at the time, and is intended primarily for short-term rental use within cities.
The Tesla project is separate from that one.
A YouTube video shows the moment Carrier employees in Indianapolis are told their factory is being moved to Mexico. More
Cheap oil and slow global growth may not be the only culprits of the global market turmoil. There's growing concern that central banks are spooking the markets too. More
Dr. Neil Warren is the 81-year-old founder of eHarmony, a site for singles looking to find love, and marry. He tells CNNMoney about what it's like to be in the business for 16 years in the business. More
Emily Cole, cofounder of Liquid Light, has pioneered technology that recycles carbon dioxide into fuel that can replace petroleum in consumer products. More