A new force in the auto market has been born, and from a pair of unlikely partners. Tesla, the high end electric sports car manufacturer and Toyota, the recently proclaimed world’s largest car manufacturer, will team to make electric cars.

The cars will still not be cost-cutter models for the average Joe, but with a step in that direction, the costs will be reduced by 60% – a very significant amount. The ability of each company to bounce off the other, and the automatic world clientele of Toyota means that the price will be further reduced when productions ramp up.

It’s not a panacea, but it certainly is a start worth monitoring, and celebrating – especially in light of all the devastation in the Gulf of Mexico.

Now if we can get those windmills and solar panels in the Mojave moving, we may have a chance of averting the ecological disaster looming on the horizon.


Toyota and Tesla will become partners to produce electric vehicles at New United Motor Manufacturing Inc. (NUMMI) in Fremont, Calif., a plant that Toyota last year ruled too inefficient to keep open.

Tesla will acquire the now-closed NUMMI property and employ 1,000 people building unspecified electric vehicles in a partnership with the world’s largest automaker, the companies announced today in Palo Alto, Calif.

Toyota will invest $50 million in the small California-based electric sports maker in exchange for Tesla’s common stock when the EV company completes its planned initial public offering.

Speaking at the announcement, Toyota President Akio Toyoda said he admired the entrepreneurial spirit at Tesla and hoped the venture will teach Toyota about quick decision-making and flexibility.

“Decades ago,” Toyoda said, “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.”

Tesla CEO Elon Musk said his company would spend “a couple of hundred million dollars” preparing NUMMI for the project.

NUMMI, a former joint venture between Toyota and General Motors, closed earlier this year amid a storm of criticism from the plant’s UAW work force.

Musk said the negotiations to acquire the closed plant concluded yesterday.

He said that Tesla’s next model, a Model S that will debut in 2012, will only account for about 20,000 units a year, but said other models will follow off of the Model S platform.

“We’re going to be occupying a little corner,” Musk said.

He said that eventually the project would account for 10,000 jobs, including supplier jobs.

Tesla’s Model S is being made possible thanks to a $465 million low-interest loan from the U.S. Department of Energy. Until that product appears, Tesla is marketing a two-seat electric sports car that retails for more than $100,000.

Tesla has said that the Model S will sell for closer to $40,000.

Until now, Toyota has expressed little interest in electric cars. The Japanese automaker has staked considerable research and marketing investment on its popular hybrid-drive vehicles, including the Prius and hybrid Camry.

Not only does this put Toyota ahead of the game in all-electric vehicles, it puts a better face on the company, after its problems with floor mats and throttles. Toyota will bring the vehicles to market that GM should have a decade ago – I’m thinking that whoever decided to crush those EV-1s at GM is lining up at the Rube Goldberg-kick-me machine right about now.


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