Tesla and Toyota Intend to Work Jointly on EV Development, TMC to Take Equity Stake in Tesla; Tesla Purchases NUMMI Factory
Tesla Motors, Inc. and Toyota Motor Corporation (TMC) intend to cooperate on the development of electric vehicles, parts, and production system and engineering support. The two companies intend to form a team of specialists to further those efforts. TMC has agreed to purchase $50 million of Tesla’s common stock issued in a private placement to close immediately subsequent to the closing of Tesla’s currently planned initial public offering.
Tesla also has purchased the former NUMMI factory in Fremont, California, where it will build the Model S sedan (earlier post) and future Tesla vehicles. As recently as April of 2010, the NUMMI factory was used by Toyota to produce the Corolla and Tacoma vehicles using the Toyota production system.
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. 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.
—TMC President Akio Toyoda
Toyota is a company founded on innovation, quality, and commitment to sustainable mobility. It is an honor and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla. We look forward to learning and benefiting from Toyota’s legendary engineering, manufacturing, and production expertise.
—Tesla CEO and cofounder Elon Musk
In May 2009, Daimler AG acquired an equity stake of nearly 10% in Tesla. The two companies had already been working closely to integrate Tesla’s lithium-ion battery packs and charging electronics into the first 1,000 units of Daimler’s electric smart car. That investment was to deepen the relationship between the two, and enable the partners to collaborate even more closely on the development of battery systems, electric drive systems and in individual vehicle projects. (Earlier post.)
NUMMI. The NUMMI plant is capable of producing half a million vehicles per year or approximately 1% of total worldwide car production. The Model S, which will be built there, is designed from the ground up to take full advantage of the electric vehicle architecture. The sedan, which Tesla unveiled in March 2009, has an anticipated base price of $49,900, including a federal tax credit. With an optional extended-range battery pack, the Model S will travel over 300 miles per charge.
The factory is located in the city of Fremont near Northern California’s Silicon Valley, very near Tesla’s Palo Alto headquarters. The short distance ensures a tight feedback loop between engineering, manufacturing and other divisions within the company, as well as easy access to the Silicon Valley engineering population.
The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system. The new Tesla Factory will give us plenty of room to grow.
—Tesla CEO Elon Musk
Toyota produced its last car there just last month. Tesla began discussions to acquire the site this spring, when it was also evaluating opportunities in Downey and Long Beach. The turnkey nature of the facility with its recent production of top quality vehicles and its considerable room for expansion made it stand out from other sites, according to the company.