It was only a few weeks ago that the joint manufacturing venture between GM and Toyota ended, and both parties pulled out of the Fremont, CA NUMMI plant. When GM announced their pull-out, the public was a bit sympathetic due to the sad state of affairs going on at GM at the time. However, when Toyota made their announcement a few weeks later, there was a little more than grumbling of displeasure.
Just in the last couple of weeks, there was a rumor flying around that Tesla and Toyota might be joining in a manufacturing venture. Most people assumed that it was going to be in Southern California – Downey, CA. After all, Tesla already have come to an agreement with local government officials in Downey, CA to build a plant there.
At 5pm, May 20th, 2010, in Palo Alto, CA there stood Elon Musk (CEO of Tesla), Akio Toyoda (CEO of Toyota), and the Governator Arnold Schwartzenegger, in front of a podium making a big announcement. Tesla and Toyota will be manufacturing and researching EV vehicles together at the recently closed NUMMI plant in Fremont.
The main terms of the deal are as follows:
- Toyota will take up private stakes in Tesla, worth $50 million,
- State of California will allow tax abatement for Tesla to tool up the NUMMI plant, worth up to $20 million
- Toyota and Tesla will develop and manufacture Electric Vehicles at the NUMMI plant
- Tesla’s Model S EV Sedan will be manufactured at the NUMMI plant
This in turn will bring in over 1,000 new jobs (or recycled jobs) to Fremont’s NUMMI plant and other anxillary suppliers and the such. With this much assistance (hand-out) from the Federal and State government, private investors, venture capital, Daimler (they pitched in $10 million, back in 2008), and now Toyota it would be an extreme shame if Tesla could not deliver on their promises.
The press conference video is below:
-KF
