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Toyota and Tesla Go for a Spin

| Monday May 24th, 2010 | 0 Comments

Japanese car maker Toyota and glossy electric vehicle start-up Tesla announced a partnership last week that will bring production of Tesla’s Model S sedan to a recently-shuttered Toyota plant in Fremont, California.

Toyota has traditionally taken a pessimistic view of the commercial viability of all-electric vehicles, and perhaps a dim view of the companies that make them as well. Here’s Toyota’s Bill Reinert, designer of the Prius, at a conference last year:

I see it all the time from those Palo Alto types. They think the whole world is like a computer company, and they’re always trying to recreate the dot-com economy. You see exactly the same mind-set with Tesla.

Oops! 

Nonetheless, the deal makes sense for both companies. It has generated a great deal of positively-charged PR, for starters. Toyota, still smarting from the recall fiasco earlier this year, gets to reopen a factory, with all the goodwill that supplies.

It also gets a wheel in the EV race, which Toyota had, at least until now, ceded to companies like Tesla and Nissan, which has the Leaf coming out later this year.

Meanwhile, Silicon-Valley based Tesla, started by eBay founder Elon Musk, can only be too happy to get the extra boost of legitimacy partnership with the world’s largest car company brings, even if it is a bit forced. They should also enjoy whatever engineering know-how Toyota brings to the table.

According to Autoblog Green, the deal will bring about 1,000 employees back to the Fremont NUMMI plant, which built Toyota Corollas and the nearly identical Chevy Prizm under a Toyota-GM joint venture dating back to 1984. Tesla hopes to push out about 20,000 of the $50,000 Model S yearly starting in 2012.

Toyota has also agreed to purchase $50 million of Tesla’s common stock following a planned public stock offering.

Tesla has sold more than 1000 of its all-electric Roadsters since production began in March 2008.


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