By Silicon Valley / San Jose Business Journal

Tesla Motors Inc. will reportedly deliver two electric car prototypes this month built using bodies of Toyota Motor Co. vehicles.

These are the first signs that the partnership announced in May between the companies is moving ahead after doubts were raised because of legal cautions in Tesla's initial public offering prospectus.

"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 issued on Saturday to CNN.

The prototypes will use Tesla's electric motors but the report didn't say which Toyota bodies are being used.

There has been speculation that the companies could work together on producing an all electric version of the Prius hybrid car which has been popular in California.

The last car off the line at the New United Motor Manufacturing Inc. plant in Fremont when Toyota closed the facility on April 1 was a Corolla.

Toyota has pumped $50 million into Tesla (NASDAQ:TSLA) immediately after its IPO as part of their partnership.

Tesla stock started at $17 on June 29 and soared as high as $30.42 the next day before falling to as low as $14.98 at one point last week. It finished on Friday at $17.40.

Copyright 2010 American City Business Journals

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