Jump to content

Tesla, Toyota to work on electric cars

Recommended Posts

Tesla, Toyota to work on electric cars

Model S to be built at ex-NUMMI plant


Toyota is acquiring a $50-million stake in Tesla and will develop electric vehicles with the California company.

Tesla will buy a closed Toyota joint-venture factory in California to build its Model S and other cars, Calif. Gov. Arnold Schwarzenegger said in a statement Thursday. The companies will cooperate on developing electric vehicles, parts and production systems and engineering support.

Toyota's investment comes as Palo Alto, Calif.-based Tesla, which sells the $109,000 Roadster electric sports car, prepares to raise about $100 million in an initial share sale.

"I've felt an infinite possibility about Tesla's technology," said Akio Toyoda, chief executive of the Japanese automaker founded by his grandfather. "By partnering with Tesla, my hope is that all Toyota employees will recall that venture business' spirit."

The company will revive the New United Motor Manufacturing Inc. plant, known as NUMMI, for 25 years a joint venture between Toyota and General Motors that closed in April. The deal will create 1,000 jobs, Schwarzenegger said.

Tesla, which has sold about 1,000 Roadsters while losing more than $230 million, is using the share sale and a $465-million government loan to help produce its Model S electric sedan. The vehicle will cost less than $50,000 after a federal tax credit, the company has said.

Tesla CEO Elon Musk, who founded online-payment company PayPal, spent more than $70 million on Tesla before last May, when Daimler of Germany invested $50 million.

Tesla is getting more competition, with General Motors, Nissan, Toyota and Ford unveiling electric models.



Share this post

Link to post
Share on other sites

Toyota invests in Tesla to help reopen Calif. plant

Christine Tierney / The Detroit News

Toyota Motor Corp. will invest $50 million in Tesla Motors Inc., a niche electric car maker, in a deal that will reopen a shuttered California factory that Toyota had operated with General Motors Co.

Toyota and Tesla announced Thursday that they would develop an electric car and build it at the New United Motor Manufacturing Inc. plant in Fremont, near San Francisco.

"It is an honor and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla," Tesla CEO and co-founder Elon Musk said at a news conference in Palo Alto, Calif., accompanied by Toyota President Akio Toyoda and California Gov. Arnold Schwarzenegger.

"They're going to create over 1,000 new jobs, and I don't need to tell you what this means to California," Schwarzenegger said.

Toyoda, grandson of the Japanese automaker's founder, said the deal fit well with his strategy to focus on producing environmentally friendly vehicles.

California is Toyota's single biggest market in the United States and home to the headquarters of its North American operations. Toyota's move to halt production at NUMMI in April after GM quit the venture was a hard and much-criticized decision. Toyota had never closed a plant.

The Japanese automaker, the world's largest, is now grappling with a huge crisis after recalling more than 8.5 million vehicles worldwide since November, including more than 6 million in the United States.

The ebullient news conference in California was in stark contrast to a contentious congressional hearing earlier in the day, when Toyota was accused of caring more about its image than about the safety of its vehicles.

"They are an admirable company," Schwarzenegger said about Toyota, praising its Prius gas-electric hybrid, which gets more than 50 miles to the gallon.

The Japanese automaker agreed to buy $50 million of Tesla common stock that will be issued in a private placement right after the closing of a planned initial public offering by Tesla. The California firm is trying to raise about $100 million, according to Bloomberg News.

The companies did not say how much of Tesla Toyota would end up owning, except that it would be a minority stake. A year ago, Germany's Daimler AG bought just under 10 percent of Tesla, and sold 4 percent to one of its shareholders, the Abu Dhabi investment fund Aabar.

Toyoda said he was impressed by Tesla's entrepreneurial spirit. "Through this partnership, by working together with a venture business such as Tesla, Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has. Decades ago, Toyota was also born as a venture business," he said. "By partnering with Tesla, my hope is that all Toyota employees will recall that 'venture business spirit' and take on the challenges of the future." Musk, in turn, said he hoped Tesla would learn Toyota's engineering and manufacturing methods.

Tesla, based in Palo Alto, has delivered more than 1,000 electric Tesla Roadsters costing more than $100,000 apiece. But the firm aspires to produce more affordable electric cars, such as a new Model S, which it will build in Fremont. It is expected to cost about $57,400, before a federal tax credit.

Tesla aims to start production of the Model S sedan in 2012 and turn out 20,000 a year.

Musk said the negotiations moved quickly. He said he was contacted earlier this year by Toyota, and told that Toyoda wanted to meet him the next time he came to California. Musk invited Toyoda to his home. "We hit it off and had a great conversation," he said. They rode together in the roadster. "Things went from there to, let's figure out how we can do things together," Musk said.

The two automakers have not decided what else to build at the Fremont plant. They are forming a team of specialists to work together.

Musk said he expected employment at the plant to rise to 1,000 soon -- and eventually reach 10,000, with half of the people employed by Tesla and the other half by suppliers.

"We've hired a lot of NUMMI people already, and we're going to hire more," Musk said. He said he didn't have strong feelings about whether the facility was unionized or not. Tesla bought the Nummi plant and the land it's on, but did not disclose the cost.

Thursday's announcement marks the second reprieve for the Fremont plant, which had been shuttered by GM in 1982, then reopened two years later as a joint venture between GM and Toyota. About 5,000 workers lost their jobs, most of them members of the United Auto Workers union, when it was shut again in April.

From The Detroit News: http://detnews.com/article/20100520/AUTO01/5200516/1148/auto01/Toyota-invests-in-Tesla-to-help-reopen-Calif.-plant#ixzz0oZH6tCuB

Share this post

Link to post
Share on other sites

Update #2: Tesla acquires NUMMI plant, to partner/build EV sedan with Toyota

By Drew Johnson - Posted May 20th 2010

State Governors aren’t usually the source of breaking automobile news, but California Governor Arnold Schwarzenegger just let a major cat out of the bag. In a speech made earlier on Thursday, Schwarzenegger announced that Toyota is partnering with California’s Tesla Motors to produce the company’s Model S sedan – to be assembled at the former Toyota-General Motors NUMMI joint venture assembly plant.

Tesla has apparently canned plans to build its Model S in Downey, California, which has irked local officials.

“We’re shocked, appalled and disgusted,” said Downey Councilman Mario Guerra in an interview with the San Jose Mercury News. “We have been dealing in good faith with Tesla and feel stabbed in the back.”

Tesla CEO Elon Musk told Downey officials of the plan just hours before Schwarzenegger made his announcement this evening in Fremont.

Governator, California help make it happen

One condition that helped to make the California location a viable option to both Tesla and Toyota was the addition of special incentives from the state. Governor Schwarzenegger helped to pass a special abatement of sales tax on capital equipment purchases, which will have a variable benefit for Tesla based on the amount of purchases it makes. Tesla CEO, Elon Musk, said that the abatement might equate to roughly $20 million in savings over the next few years.

Plant gets new life

Tesla purchased the NUMMI facility for an undisclosed amount and the company says it will look to hire about 1,000 workers shot-term to assemble the Model S. On a long-term basis Tesla projects approximately 5,000 jobs will be created at Tesla, and another 5,000 jobs for its suppliers.

Curiously, NUMMI will continue to control the parking lot and an adjacent parcel, although it won’t have any say in the plant, as Tesla only purchased parcel number two of three.

Previously, the NUMMI plant was operated as a joint venture between Toyota and GM until the Detroit automaker abruptly pulled out its stake last year. The last Toyota to be built at the plant, a Corolla, rolled off the line last month.

Musk, Toyoda work out deal

Musk and Toyota chief Akio Toyoda said that they worked together on the deal, which will see a $50 million investment in Tesla from the Japanese automaker, according to Schwarzenegger.

“We look forward to learning and benefiting from Toyota’s legendary engineering, manufacturing, and production expertise,” Musk told the Los Angeles Times.

It’s unclear exactly what Toyota will get out of the deal – although a Toyota-badged version of the Model S seems possible. Musk did suggest that joint projects will commence before the mid-2012 expected start of production of the Model S.



Share this post

Link to post
Share on other sites

Your content will need to be approved by a moderator

You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets



Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.