Toyota follows Mercedes by selling Tesla stake

Japanese firm Toyota has recently revealed it is following the example set last week by Mercedes parent company Daimler, and selling off its shares in California-based Tesla Motors. The 2.4% stake Toyota had will net it about $640 million in profit.

Both moves come during a slightly gloomier time at Tesla. Its share price has dropped 19% since September following huge increases in previous years. The stock price didn't recover even after the announcement of a four-wheel drive, super-fast Model S and autonomous driving technology earlier this month.

Toyota said in a statement that the sale came "as part of our process of regularly reviewing our investment portfolio", suggesting the numbers just weren't adding up anymore. The firm did also state that it maintained a relationship with Tesla, and "will evaluate the feasibility of working together on future projects".

Toyota bought $50 million worth of shares in a fledgling Tesla in 2010, back when Elon Musk's firm was still a vulnerable startup. Tesla's huge growth quickly followed, netting the Japanese brand significant profit on its investment.

Earlier this year, Tesla revealed that it wouldn't be supplying batteries for Toyota's electric models for much longer. Toyota also stated this year that it intended to wind down their investment in electric cars, looking instead at hydrogen fuel cell technology, which itself has been criticised by Tesla's CEO Elon Musk.

It could be said that both Daimler and Toyota see Tesla as a considerable rival, with the Model S saloon stealing sales from the Mercedes S-Class and Lexus LS.

Are investors slowly losing faith in Tesla's continued growth plans or are brands like Mercedes and Toyota starting to see the firm as a genuine rival? Let us know your thoughts in the comments below.