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  (Source: Tesla Motors)

Tesla Model S  (Source: Motor Trend)
Tesla and Toyota drop a bombshell

The electric automobile market is booming as more and more consumers are looking to go green and to reduce the emissions and the amount of fuel that they consume. There are a number of electric cars and hybrids on the market today with cars like the Prius and the Tesla Roadster.

California governor Arnold Schwarzenegger hinted earlier today that Toyota and Tesla had plans to produce vehicles together. Now, the cat is officially out of the bag.

Toyota is lending a hand to Tesla Motors in the development of future electric vehicles including the next generation Roadster and the upcoming Model S sedan. According to a joint press release, Toyota will help Tesla with the development of "electric vehicles, parts, and production system" and it will also offer engineering support.

The Japanese auto giant will be funneling a relatively paltry -- for Toyota -- $50 million into Tesla through the purchase of common stock. Tesla will also take over the NUMMI manufacturing plant in Fremont, CA that was to be shutdown after GM went bankrupt and Toyota was left without a partner to run the facility.

"I sensed the great potential of Tesla's technology and was impressed by its dedication to monozukuri [Toyota's approach to manufacturing]," said Toyota Motor Corporation 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."

According to Tesla CEO Elon Musk -- and reported by Autoblog -- by keeping NUMMI open, 1,000 employees will be brought back into the fold to build new electric vehicles. Those 1,000 employees could pump out roughly 20,000 vehicles in the first year. However, the plant has the capacity to build up to 300,000 vehicles a year and can employ up to 10,000 workers.

"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 Musk. "The new Tesla Factory will give us plenty of room to grow."

"We look forward to learning and benefiting from Toyota's legendary engineering, manufacturing, and production expertise," continued Musk.

Tesla couldn't have asked for a better partner in Toyota to develop electric vehicles. Toyota has a vast portfolio of hybrid vehicles and expertise in electric motors and battery design. The company also has very deep pockets and a wealth of knowledgeable engineers.

And this announcement also helps push Toyota's current woes concerning vehicle safety and recalls to the back burner.

With Toyota's backing, we can count on the Model S sedan being on track for its 2012 debut. The Model S will have a base price of $49,900 after a $7,500 federal tax credit, dash to 60 mph in around 5.5 seconds, and will have a driving range of roughly 300 miles.

Despite all the positive news surrounding this announcement, there is one big loser in all of this: the town of Downey, California. Tesla was all set to work on an assembly plant in the town until it was wooed away to the Fremont.

"To think of all the time and effort that has been needlessly wasted by Downey due to Tesla misleading us is unconscionable," said Downey Mayor Pro Tem Luis Marquez, according to The Downy Patriot. "The question must now be asked if Tesla plans to reimburse all the costs associated with their underhanded negotiation tactics."

"Mr. Musk gave me his word Tesla would be coming to Downey. Today I learned the same lesson several other cities have learned when dealing with Mr. Musk," complained Councilman Mario Guerra. "I learned just how disingenuous Tesla was in their dealing with Downey and I now have a new appreciation why the public is fed up with corporate America. To think, Downey had planned to sign the lease tomorrow."

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Made in the USA
By hellokeith on 5/20/2010 10:20:57 PM , Rating: 2
It is a shame that one of the Big Three could not partner with Tesla. While it might be a conflict of interest for GM with the Chevy Volt, perhaps Chrysler and certainly Ford could do it.

I suppose we should be content at least an American auto plant is being used.

RE: Made in the USA
By Brandon Hill on 5/20/2010 10:30:21 PM , Rating: 2
I don't think that any of the Big 3 have $50 million laying around collecting dust. I mean, hell, Toyota paid off that $18 million fine to the U.S. government like it was nothin'

RE: Made in the USA
By Runiteshark on 5/20/2010 10:36:17 PM , Rating: 5
Ford does.

RE: Made in the USA
By Brandon Hill on 5/20/2010 10:43:01 PM , Rating: 3
Ford is too busy trying to pay down $34B in debt, and is forgoing issuing dividends because of it.

RE: Made in the USA
By quiksilvr on 5/20/2010 11:44:36 PM , Rating: 2
Okay, I'm going to ask the burning question.

If Ford is capable of making a 31 MPG 300 HP V6 engine, why in f*ck hell can't they make a 50 MPG 100 HP V4 engine and take on the hybrids? Mathematically and physically speaking, it is totally possible, especially considering that the Ford Mustang weighs over 3000 pounds.

RE: Made in the USA
By Flunk on 5/21/2010 12:10:13 AM , Rating: 2
Funny enough, they are working on that right now. Expect to see a Fiesta that beats 50MPG (current model is 40MPG) when they introduce the ecoboost version within 2 years.

RE: Made in the USA
By Anoxanmore on 5/21/2010 9:13:35 AM , Rating: 2
Ecoboost isn't electric though... ;)

RE: Made in the USA
By RjBass on 5/21/2010 10:53:33 AM , Rating: 3
I don't know that it needs to be if it is getting 50+ mpg. That would be awesome.

RE: Made in the USA
By Jaybus on 5/21/2010 12:47:39 PM , Rating: 2
No, but it will be half the cost. $25,000 worth of gasoline is a lot of miles at 50 MPG. At $5/gal, that's 250,000 miles, or the entire lifetime of the vehicle. Green is not an argument either when 50% of the electricity comes from coal.

RE: Made in the USA
By ender21 on 5/25/2010 6:01:35 PM , Rating: 2
And something like 95-99% of gasoline comes from oil. I'll take 50% from coal any day. That's quite a reduction. (Our electricity comes from solar & natural gas, which would mean 100% less than coal.)

Any regular old Internal Combustion Engine that can be made that gets better and better MPG like Ford's could then be made EVEN BETTER by throwing on a hybrid drivetrain. Then it's not 50MPG. It's 75. Either way, it's all good.

RE: Made in the USA
By Shining Arcanine on 5/20/2010 11:09:11 PM , Rating: 1
It would be a shame if one of the Big Three did partner with Tesla. They ruined their own companies. Do they need to ruin the automobile companies of tomorrow too?

RE: Made in the USA
By Flunk on 5/21/2010 12:12:26 AM , Rating: 1
Do you mean Italian car company Fiat-Chrysler?

I think you're miscounting American car companies, there is no longer a "big 3".

RE: Made in the USA
By Spookster on 5/21/2010 1:01:48 PM , Rating: 3
Would that make it the big 2 1/2?

RE: Made in the USA
By theapparition on 5/21/2010 8:12:28 AM , Rating: 2
Someone correct me if I'm wrong, but I thought Chrysler also had a stake in Tesla.

RE: Made in the USA
By Ammohunt on 5/21/2010 2:42:49 PM , Rating: 2
They are crazy to setup shop in California over taxation but a premium on an already expensive car.

RE: Made in the USA
By Ben on 5/24/2010 1:23:01 AM , Rating: 2
I agree. Wait until they start getting ready for production and they are hit with the reality that ANY other State would be cheaper and easier to operate in.

RE: Made in the USA
By JustTom on 5/24/2010 11:27:10 AM , Rating: 2
Maybe because none of the Big Three can afford to lose money on every car made.

Is it just me?
By lightfoot on 5/21/2010 11:50:15 AM , Rating: 2
...or is Downey Mayor Luis Marquez a big cry baby?

Damn Tesla for doing what is in their best interest, damn Toyota for out negotiating the city of Downey, and heaven forbid that Tesla isn't living up to the terms of a lease that they haven't yet signed!

Boo-hoo! Let us all cry for the town of Downey. Given the mayor's new reputation for bad mouthing companies that think about doing business there I suspect other companies won't be as eager to follow in Tesla's footsteps.

I know I wouldn't.

RE: Is it just me?
By blueboy09 on 5/23/2010 2:22:01 PM , Rating: 2
For your FYI, the mayor is concerned about what everybody is in this country, job recession, and no one is immune from this: not you, not me, nobody, and anybody can be w/o a job at any time. Don't mean to be preachy, but do you know exactly the condition of that city in terms of jobs in Downey? They could be suffering exactly like those in other cities where people are still searching for a job. [end of rant] - BLUEBOY

RE: Is it just me?
By afkrotch on 5/24/2010 11:45:31 PM , Rating: 2
I think bums are immune from a job recession. Also prisoners. Drug dealers. Maybe some prostitutes. You know, the stuff that tends to be immune when anything happens.

RE: Is it just me?
By Ben on 5/24/2010 1:31:06 AM , Rating: 2
Yes he is.

But we get a lot of those around here, so it's not surprising. Around here, everyone just holds their hand out and cries when no one fills it.

RE: Is it just me?
By Moishe on 5/24/2010 3:10:40 PM , Rating: 2
I agree completely. What a whiner. If Musk/Tesla never agreed in writing, then there is no contract and no reason to pay back anything. This guy lost the negotiation and wants to be reimbursed for the cost of getting to the negotiation.

All I can say is, if you can't afford to get to the event, you shouldn't be there.

By muIIet on 5/20/2010 10:19:42 PM , Rating: 2
I can't wait to see what they come up with.

RE: Impressive!!
By Gul Westfale on 5/20/2010 10:21:49 PM , Rating: 2
and since mercedes holds a stake in tesla, will they have access to toyota's tech now?

RE: Impressive!!
By The0ne on 5/21/2010 11:33:13 AM , Rating: 2
No, those % of ownership are unknown. If the stake is small they won't get the rights to most of the techs.

By pro5 on 5/21/2010 1:56:29 AM , Rating: 4
Sounds like a perfect partner. Should help bring prices on EVs down across the board. And may even renew a spark of creativity within Toyota.

I'm putting in an early request for an ELECTRIC MR2 (Designed in spirit and looks after the MK1 - not the bloated MK2 or the too girl-i-fied MK3) keeping as much of the wedge (as law will now allow without pop up lights) but with a 4.5 sec 0-60, and 90 MPG equiv! ;) like 'new mini' - bring back an upgraded legend. Make a cheaper alternative to the Tesla roadster too (albeit not quite as fast/light).

Then they can do an electric Supra too, bring back their sporting legends one by one with lots of 'spark'

RE: perfect!
By EasyC on 5/24/2010 12:32:33 PM , Rating: 2
*looks at his 475 HP MR2*... I would much rather have something with looks AND power. MK1's didn't have that.

By ksherman on 5/20/2010 10:57:32 PM , Rating: 1
A plant with a fascinating history:

Glad to hear it will stay open and that it will produce a higher-caliber vehicle.

By chrnochime on 5/21/2010 10:06:57 AM , Rating: 2
And to think this new NUMMI will be controlled by UAW too, if everything goes well

Can't wait to see how UAW will scheme to make Tesla suffer LOL

And the town of Downey....Unless their agreement/prelim contract stipulates that they'll be reimbursed for spending time to accommodate their future plant or allow you to go the ligitation route, quit whining.

why Calistan?
By FPP on 5/21/2010 3:17:50 PM , Rating: 1
you cannot pick a worse place to manufacture.

RE: why Calistan?
By Moishe on 5/24/2010 3:12:54 PM , Rating: 2
I can't think of a good reason.

By JustTom on 5/24/2010 11:37:03 AM , Rating: 2
The electric automobile market is booming as more and more consumers are looking to go green and to reduce the emissions and the amount of fuel that they consume

Really? Do you have any numbers on this boom? Because frankly none of the numbers I have seen indicate a boom.

Editors Needed
By bissimo on 5/21/10, Rating: -1
"I modded down, down, down, and the flames went higher." -- Sven Olsen

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