By Celsias team
Posted on May 25, 2010. Listed in:
A dream team for transforming the world's personal transport could be emerging, as Toyota has just announced it will take a US$50 million stake in Tesla motors.
Businessgreen.com gets all revved up about it.
Two of the biggest names in green motoring, Toyota and Tesla Motors, announced a wide-ranging deal yesterday that promises to send shockwaves through the global auto industry, after the Japanese giant said it would take a $50m stake in the high-profile electric car startup.
Under the terms of the agreement, announced at a press conference in California hosted by Toyota chief executive Akio Toyoda and his Tesla counterpart Elon Musk, Toyota will purchase $50m of Tesla's common stock immediately after the company completes its planned IPO, giving Toyota a stake of around 2.5 per cent in the firm.
Tesla will also take over Toyota's New United Motor Manufacturing Inc (NUMMI) plant in the San Francisco area, which had been scheduled to close, and use it to build its Model S all electric sedan.
Production of the Model S, which is being touted as an affordable mainstream alternative to the Roadster electric sports car that made Tesla's name, is expected to begin in 2012, quickly scaling up to 20,000 per year.
The move will bring to an end efforts by secretive startup Aurica Motors to take over the NUMMI plant for production of its proposed electric car.
Toyota will now join Daimler as the second global car firm to take a stake in the startup, further underlining Tesla's status as one of the most promising electric car startups to have emerged in recent years.
However, the deal promises to go beyond that of a financial transaction designed to provide a boost to Toyota's green credentials in the wake of a series of embarrassing recalls for its flagship Prius hybrid.
The two companies have agreed to set up a new team to cooperate on the development of "electric vehicles, parts, and production system and engineering support", and Toyota openly admitted that it is now rethinking its green vehicle strategy, which has previously focused on hybrid engines.
The company insisted it still regards hybrid technology as the best option for longer journeys, but admitted Tesla's battery technology, which aims to give the Model S a range of between 160 and 300 miles between charges, had made it reconsider the role electric vehicles could play in the company's portfolio.
Toyota is now expected to actively investigate how Tesla's technology could be used in its cars and Toyoda said he also hoped the smaller company's start-up culture would rub off on Toyota's operations. "Toyota was once a start-up company," he said at the press conference. "Working with Tesla will provide us with a powerful stimulus."
Musk hailed Toyota's investment as an "honour and a powerful endorsement of our technology", adding that the company planned to make use of some of Toyota's manufacturing expertise as it looks to establish itself as the world's first large-scale electric car manufacturer.
The deal comes just a day after rival Californian electric car startup Coda Automotive announced it had raised an additional $58m through a new funding round designed to support the launch later this year of its first electric sedan.
