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Toyota plugs into Tesla

Revving up: Tesla's Roadster is just a foretaste of electric vehicles from the electric vehicle pioneer that is now part owned by Toyota.

Hybrid leader Toyota joins forces with EV pacesetter Tesla in new US joint venture

21 May 2010

THE world’s biggest motor company has teamed up with the world’s most advanced electric vehicle maker to mass-produce electric cars at a recently closed Californian auto factory that produced Toyota and General Motors small cars until the global financial crisis brought the arrangement undone.

Toyota announced that it would take a $US50 million ($A60m) stake in Silicon Valley-based Tesla Motors under the deal, while Tesla will buy the New United Motor Manufacturing car plant at Fremont, near San Francisco, thereby saving the jobs of 1000 of the 5000 workers who were laid off after first GM and then Toyota quit joint production there.

It is a big step up into the mainstream for boutique EV maker Tesla, which is renowned for its pioneering, high-performance electric sports cars that can hit 200km/h and travel 380km per charge of their lithium-ion batteries.

Tesla’s technologies have attracted attention from other car-makers, including Daimler AG – owner of Mercedes-Benz – which bought a slice of Tesla last year and contracted it to produce batteries for its upcoming electric Smart.

The Toyota move marks a big vote of confidence in the future of electric vehicles in the United States, as the NUMMI plant is capable of mass producing up to 6000 vehicles a week.

Tesla said it chose the NUMMI plant because it was a "turn-key" purchase, compete with manufacturing equipment, as well as being close to its Palo Alto heaquarters.

The venture was announced jointly by Toyota president Akio Toyoda and Tesla founder and CEO Elon Musk, who said the two companies planned to co-operate on the development of electric vehicles, parts, and production system and engineering support, guided by a joint team of experts.

Mr Toyoda said he had sensed the great potential of Tesla’s technology, and had been impressed by its dedication to monozukuri (Toyota’s approach to manufacturing).

 center imageLeft: Tesla S. Below: Toyota Plug-in Hybrid Prius.

“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,” he said.

“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.”

Mr Musk said Toyota’s investment in Tesla was a powerful endorsement of Tesla technologies.

“We look forward to learning and benefiting from Toyota’s legendary engineering, manufacturing, and production expertise,” he said.

Mr Musk said Tesla’s goal was to produce increasingly affordable electric cars to mainstream buyers, “relentlessly driving down the cost of EVs”.

He said his company would spend a couple of hundred million dollars preparing NUMMI for production, with the cost being covered by $US465 million in Department of Energy loans that will fund the manufacturing ramp-up, as well as development of the upcoming Model S sedan.

Tesla will also benefit from California tax breaks on capital expenditure.

So far, Tesla has delivered more than 1000 Roadsters to customers in North America, Europe and Asia, and claims to be the only car-maker in the US building and selling highway-capable EVs in serial production.

The company plans to open a dealership in Australia, in Sydney, this year.

Toyota – the world’s biggest maker of hybrid vehicles, including Japan’s top-selling car, the Prius – has started field testing of a plug-in Prius.

It plans to bring a pure EV on to the market by 2012, and that vehicle is almost certainly earmarked for the new joint venture plant, probably alongside the Tesla S.

With 2.5 million hybrid cars already on the roads around the world, Toyota is the world’s biggest producer of petrol-electric hybrids and has immense experience in battery technologies and electric motors.

The NUMMI factory was established jointly by Toyota and GM as a state-of-the-art production facility in 1984 when the two automotive giants climbed into bed for a short and rocky model-sharing relationship that also extended to Holden and Toyota Australia.

It was regarded as one of the best plants for quality products in the US, making Toyota Corollas and Chev Novas.

Other models followed, but when GM decided to axe Pontiac at the height of the global financial crisis, production of the Pontiac Vibe – based on Toyota’s Matrix that was also made at the factory – forced GM’s withdrawal from the venture.

After GM pulled out, Toyota ruled that the NUMMI plant was too inefficent to keep open, and decided to close it, shutting the doors last month.

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