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Toyota has agreed to invest $50m in Tesla, the Californian builder of battery-powered cars, as it seeks to extend the dominance it has built in petrol-electric hybrids into the next generation of green vehicles. The deal announced on Thursday makes Toyota the second big global automaker to invest in Tesla, a six-year-old startup founded by Elon Musk, creator of the internet payment service PayPal, and backed by other Silicon Valley luminaries such as Google's founders Larry Page and Sergei Brin. The deal could help Toyota repair its reputation in the US after a series of safety problems that have forced it to recall millions of its cars, pay a $16.4m fine and endure multiple investigations by Congress. Toyota has built a big lead in low-emission cars with its Prius hybrid, which went on sale in 1997, and is by far the best-selling alternative to standard petrol-only vehicles. But some other carmakers are preparing to try and leap-frog Toyota by introducing battery-only cars.

Toyota is maintaining its ambitious targets on the diffusion of hybrid cars. Some competitors are pushing the full-electric concept, guess why?

What will the dominant design of next-generation cars be? Renault probably is the most daring automaker, with its decision to bypass hybrids and go straight to full-electric. The business model is changing, and they are partnering with Project Better Place so that people will use batteries on a pay-per-use base.

Technology sometimes leads to interesting hybrids. Tiltrotors are an interesting mixture between airplanes and helicopters... but frightfully expensive. Yet, while they certainly cannot be considered to be dominant designs, they seem to make sense in market niches

Innovation sometimes creates new and "hybrid" industries. In this case it is "nutraceuticals", a blend between food and pharma. Drivers are customer demand for a more healthy life, food companies looking for higher added-value products, and pharma companies finding it ever more difficult to find new drugs rewarding the huge R&D effort required

Renault-Nissan probably is the most outspoken carmaker supporting the shift to electric vehicles. It is interesting to notice its understanding of the role of complementary goods (i.e. recharging stations) in supporting diffusion, and of the value of high vertical integration during the fluid phase of innovation (e.g. batteries).

German Chancellor Dr. Angela Merkel is trying to mark the future of the electric and hybrid vehicles founding the "National Platform for Electric Mobility" - a new alliance dedicated to promoting sustainable mobility. A clear objective: she wants to take electric mobility out of its niche model status and become the market leader for a new type of sustainable mobility by 2018. This strategy is planned by the German federal government, which would like to to promote electro-mobility and to see about one million electric vehicles on the roads by 2020. It's a clear way to force the German carmakers for reshaping mobility. The market needs innovations that are intelligently coordinated and networked, from the engines themselves to a reliable infrastructure (charging points) and well-trained experts who can deal with highly complex technologies.

An article highlighting issues that carmakers will have to tackle in the future, with electric vehicles, self-driving technology, and a new concept of mobility. The challenge is not only related to technology but also to business models.