Blockbuster Deal: Toyota Announces EV-Making Tie-Up with Tesla
By Michelle Krebs May 21, 2010Forget unintended acceleration. Toyota Motor Corp. is at the epicenter of another auto- 
industry story of the year: teaming with radical electric-vehicle upstart Tesla Motors to jointly develop a new electric vehicle while also brokering Tesla's purchase of Toyota's recently shuttered New United Motor Manufacturing Inc. assembly plant in Fremont, Calif.
The deal means the NUMMI plant is where Tesla will build the heralded Tesla S battery-powered sedan - and both companies will develop and produce other EVs there.
Toyota also will buy $50 million worth of Tesla stock when the company initiates its planned public offering. But the teaming of the two companies from widely divergent places on the corporate spectrum will have enormous repercussions throughout the industry.
The move at once boosts the estimable but quirky Tesla's legitimacy and offers presumptive access to Toyota's vast product-development and engineering capabilities. Toyota - like Tesla's other big-whale auto-industry investor, Daimler AG - gets to tie into Tesla's ultra-focused EV expertise, Silicon Valley hipness and low-resistance management process.
The venture also is certain to harass all of Toyota's major competitors.
Although many have their own well-formed EV initiatives, none are allied with Tesla, with its Roadster being the first company to produce a completely road-worthy battery-electric car. And Tesla promises the Model S sedan will have a game-changing 300-mile driving range.
Tesla has panache. Tesla has an exotic, high-performance electric sports car that costs big money. Tesla has a string of A-list celebrity owners.
And now Tesla now has the world's No. 1 automaker as a sugar daddy.
Just about this time last year, Daimler invested $50 million for not quite 10 percent of Tesla, so it's far from clear how Tesla's two potentially pushy lenders will get along. Meanwhile, Toyota also gets to offload the political baggage that came with shutting down the Nummi plant, which employed 4,700 workers: Tesla CEO Elon Musk boasted the Tesla-Toyota venture will end up producing 10,000 jobs.
And these are just the high points. For the fully detailed rundown of this seminal collaboration, get it from the experts immersed in the alternative-propulsion sector at Edmunds.com's Green Car Advisor. - Bill Visnic, Senior Editor
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With a reported $85K price for a Tesla S, I want to know how Musk comes up with the 10,000 employee figure? How many $120K roadsters has the company sold? The math simply does not add up. And furthermore a total investment of $100 million is not much for automotive development. This is just a PR ploy by Toyota.
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