In 2010, Japan's biggest automaker acquired around a 3 percent stake in the Palo Alto, Calif.-based automaker for $50 million.
Toyota spokesman Ryo Sakai said the company had sold all of its shares in Tesla as of the end of 2016, as part of a regular, periodic review of its investments, after it had initially sold down a portion in 2014.
"Our development partnership with Tesla ended a while ago, and since there has not been any new developments on that front, we decided it was time to sell the remaining stake," he said.
Toyota held 1.43 percent in Tesla as of July 2016, according to data compiled by Bloomberg.
Toyota's original investment in Tesla came as automakers were competing to introduce more fuel-efficient vehicles in the U.S. Toyota also sold a shuttered California factory to Tesla for $42 million.