Toyota and Tesla to Partner on Electric Cars; Tesla Buys NUMMI to Build Model S in California

Toyota and Tesla to Partner on Electric Cars; Tesla Buys NUMMI to Build Model S in California

Japanese giant Toyota Motor Corp and American electric car start-up Tesla Motors have announced a partnership that will see both automakers work towards future electric cars. In the short term, however, the deal has a more immediate result, namely that Toyota is spending $50 million to buy a significant stake in Tesla, which will then use that money to purchase a part of the NUMMI factory in Fremont, California.

Until recently NUMMI has been used by Toyota to build both the Corolla and Tacoma. Tesla will use it to build the company’s new flagship Model S electric luxury sedan. Company CEO Elon Musk said he expects to build roughly 20,000 models a year at first (around 2012), bringing 1,000 jobs back to the NUMMI plant. If the plan ever reaches max capacity of half a million models it could employ as many as 10,000.

In addition to the physical assets, Toyota will also teach Tesla about its production system, a “widely copied system that lead to dramatic quality improvements and unprecedented manufacturing flexibility and worker satisfaction.”

Toyota CEO Akio Toyoda hopes the partnership will also benefit his company by learning from the small and agile Tesla. “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,” said Toyoda. “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.”

With access to Toyota’s production methods and a proper facility to build the cars, Tesla intends to drive down the cost of electric cars through economies of scale. The company’s first car, the Tesla Roadster, costs roughly $100,000 while the new Model S is expected to retail for $49,900 after a federal tax credit.

[Source: Toyota and Autoblog]

Official release after the jump:

PRESS RELEASE

Tesla Motors and Toyota Motor Corporation Intend to Work Jointly on EV Development, TMC to Invest in Tesla

May 20, 2010 – Palo Alto, California, U.S.A. – 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 $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.

Tesla Motors Announces Factory in Northern California Silicon Valley factory will become the home of the Model S sedan

PALO ALTO, Calif. — Tesla Motors has purchased the former NUMMI factory in Fremont, California, where it will build the Model S sedan 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 industry-leading Toyota production system. It is one of the largest, most advanced and cleanest automotive production plants in the world.

It is capable of producing half a million vehicles per year or approximately 1 percent of total worldwide car production. The award-winning plant was the birthplace of the vaunted Toyota Production System, a widely copied system that lead to dramatic quality improvements and unprecedented manufacturing flexibility and worker satisfaction.

The Model S is expected to be the first pure electric premium sedan and 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, and is intended to deliver the foremost design and technology in the automotive world. 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 location means Tesla can hire best-in-class engineers in Silicon Valley. The short distance also ensures a tight feedback loop between engineering, manufacturing and other divisions within the company.

“The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system,” said Tesla CEO Elon Musk. “The new Tesla Factory will give us plenty of room to grow.”

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.

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