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Tesla and Toyota begin working together

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May 24, 2010

Tesla and Toyota begin working together

Tesla and Toyota begin working together

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Electric auto pioneer Tesla Motors and Toyota Motor Corporation have signaled their intent to work together on a number of initiatives, primarily developing EVs in California. Toyota's purchasing of US$50 million worth of Tesla shares completes a stunning twelve months for the start-up which has included Daimler purchasing a substantial (more than 5%) share, a US$30 million tax break and a US$465 million DoE loan. Partnering with the world's largest automobile manufacturer gives Tesla immense credibility and the security to purchase a new factory. For Toyota, it sures up its ability to compete in the EV market, at the same time as winning a few cool-school points by partnering with the trendy, publicity-savvy Tesla brand. If, or as-seems-likely, when Tesla goes public, it will be first American auto company to do so since Ford more than a half century ago.

The official announcement reads as follows:

Tesla Motors, Inc. (Tesla) and Toyota Motor Corporation (TMC) today announced that they 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 USD$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.

“I sensed the great potential of Tesla’s technology and was impressed by its dedication to monozukuri (Toyota’s approach to manufacturing),” said TMC President Akio Toyoda. “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.”

“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,” said Tesla CEO and cofounder Elon Musk. “We look forward to learning and benefiting from Toyota’s legendary engineering, manufacturing, and production expertise.”

TMC has, since its foundation in 1937, operated under the philosophy of “contributing to the society through the manufacture of automobiles,” and made cars that satisfy its many customers around the world. TMC introduced the first-generation Prius hybrid vehicle in 1997, and produced approximately 2.5 million hybrids in the twelve years since. Late last year, TMC started lease of Prius Plug-in Hybrids, which can be charged using an external power source such as a household electric outlet. The company also plans to introduce EVs into the market by 2012.

Tesla’s goal is to produce increasingly affordable electric cars to mainstream buyers – relentlessly driving down the cost of EVs. Palo Alto, CA-based Tesla has delivered more than 1000 Roadsters to customers in North America, Europe and Asia. Tesla designs and manufactures EVs and EV powertrain components. It is currently the only automaker in the U.S. that builds and sells highway-capable EVs in serial production. The Tesla Roadster accelerates faster than most sports cars yet produces no emissions. Tesla service rangers make house calls to service Roadsters.

8 Comments

Toyota and Tesla,,, sounds like a marriage made in heaven for all concerned ! For the car buyer it means more affordable electric vehicles

robinyatesuk2003
24th May, 2010 @ 06:44 am PDT

This is interesting as Toyota has bad mouthed EV's for yrs! It took others making Prius' into plug in hybrids to force them to do the same and even them they have dragged their a--es on it.

I think this is more about selling their Cal plant than anything else.

Nissan and Ford are going to clean Toyota's clock in EV's.

And the PR that Toyota is dedicated to quality is a joke backed by their recent problems and refusing to admit, fix them until forced.

jerryd
24th May, 2010 @ 07:44 am PDT

Partnerships like this are important to continuing the quest to wean ourselves from foreign oil.

Lawrence Weisdorn
24th May, 2010 @ 12:17 pm PDT

This T and T synergistic combination bodes well for development of the electric car.

Adrian Akau
24th May, 2010 @ 02:46 pm PDT

I'd like the writer to look more closely at his prose:

I think that should be "shores up ability" as in boosts support for, not "sures" as in guarantee (a linguistic stretch, but barely allowable).

Either way, Toyota needs a kick up the rear to accellerate its involvement and efficiency lately.

The Skud
24th May, 2010 @ 08:09 pm PDT

Is this really goods news for the average car buyer?

All this investment capital and the tax breaks going to a company that manufactures just one model which sells for over $100,000, with plans to produce a "cheaper" electric car for the mass market, at a nominal cost of only $50,000.

Tesla is setting an ominous trend for electric cars -- saying consumers must expect to pay an outrageous premium for an electric car. Toyota smells big profit with this kind of approach to eco-friendly transportation, suited more to the trendy wealthy, than the average market. Sad.

Photon
24th May, 2010 @ 08:55 pm PDT

Yeah, that's what the world needs...A car that goes from 0 to 60 faster than a Porsche 911 Turbo (3.7 seconds) with a top speed of 193 MPH! made by a company with a history of failing brakes and sudden engine surges! Yeah! Add some excitement in your lives!

Try shutting down THAT engine when it runs away!

Ed
25th May, 2010 @ 10:34 am PDT

I hope Tesla use a key to start and stop the engine, or better still, a old-style up-down switch on the dashboard where the passenger can also reach. Toyota followed Microsoft into thinking it best that one use a button for which you do the same thing (depress slightly) to turn something on and turn it off. The idea has never worked well on PCs, and with some Toyotas unable to be turned off, the concept is equally inappropriate in vehicle use.

The only other risk is that Toyota should not have so much say in Tesla as to control direction. Who can forget the film "Who Killed the Electric Car?"... as to the dead hand of GM on the deployment of such technology.

Personally, I believe the real answer is to allow a light-weight commuter class of vehicle, with a top speed limited to 45-50mph (say). If such vehicles have zero emissions, we should allow a ten-year exemption from all crash tests, so such vehicles can be used for commuting. Being stuck at 10mph on a freeway means you have a greatly reduced risk of a 60mph side-impact collision. These exemptions would allow smaller companies to produce innovative cars - using mountain bike style componentry to produce super-light electric vehicles, at very modest cost. Let's remember that internal combustion cars would never get started today if all of the imposts on vehicle design applied from the outset. It is estimated that it costs a billion dollars for a major car manufacturer to come out with a brand new car (from design through production facilities).. which is why most only make small cosmetic changes to existing offerings. But we need to think differently if we are to make the green change quickly enough.

Graeme Harrison
25th May, 2010 @ 05:24 pm PDT
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