Why Toyota Just Signed a Deal with Tesla's Battery Maker

Toyota Motor Corporation (NYSE: TM) and Japanese electronics giant Panasonic Corporation (NASDAQOTH: PCRFY) said that they are considering a joint effort to develop batteries for electric vehicles.

The companies have signed an agreement to begin studying the feasibility of mass-producing "prismatic" lithium-ion batteries for automotive use. Panasonic is a leader in making batteries for electric vehicles; perhaps most prominently, it's Tesla's (NASDAQ: TSLA) partner in the giant Gigafactory in Nevada.

Is Toyota trying to get a leg up on Tesla by cozying up to its battery maker? Here's a look at the deal, and what it might mean for the companies involved.

Source: Fool.com