"It is a very significant development not only for Tesla, but for Toyota and EV mass market evolution. Tesla has gained more credibility with this move and it is all about Tesla S model mass production. Roadster was making headlines, but not sales numbers. Tesla S promised to be a 5 seater with more than 200 miles range and price tag of 50000USD. It will not be able to compete with Nissan Leaf at USD25000 after federal tax rebate, but it is the move into right direction. Now apart from Mercedes, Tesla can count on Toyota's expertise in safety, mass production and cost control. Toyota way into EV space is not straight forward, it is the case when actions are more significant than words and sometimes words could be misleading. Toyota announced last September that after years of research they do not see Lithium batteries as a commercial choice for Hybrids at the moment. Lithium juniors crashed with the news hitting the wires. After that surprisingly Toyota place on display a few advanced models of Hybrids and plug-ins with lithium batteries an Frankfurt Motor show 2009. Toyota engineers at the show were talking about clear advantage for use of Lithium batteries. Later 2009 Toyota trading house took a stake in upcoming Lithium developer Orocobre Resources with lithium brine salar in Argentina. Now they have quickly moved into Tesla buying the time and expertise on lithium battery side and controlling systems. It has happen just weeks after the usual bashing of EVs and that Hybrids are the only way in the future."
Now we have another EV in the picture - it is Toyota's concept Plug-In EV with lithium battery. Lithium based battery chemistry is an industry adopted standard now in EV space and Nissan Leaf is the price leader with its price as low as 20000USD after federal and state rebates in some markets. Nissan spent more than 16 years and 5 billion dollars developing with NEC lithium batteries and Electric Cars - Toyota was concentrating on soft hybrids with small batteries and has lost advantage of first mover into the hybrid space. Tesla could bring the battle back close to the US market - where place will be for Tesla S and Toyota EV following the market leaders (as we think) Nissan Leaf and GM Volt.
Forbes:
It's tough to say which company will benefit most from the new partnership between Japanese automotive giant Toyota Motor and American electric car upstart Tesla Motors.
In a surprise announcement the companies said they will cooperate on the development and production of electric vehicles and components, and that Toyota will buy a $50 million stake in Tesla when it goes public in the near future. Tesla also said it had purchased Toyota's former NUMMI factory near Silicon Valley.
The partnership undoubtedly boosts the credibility of Palo Alto, Calif.-based Tesla. Despite lots of hype about its battery-powered sports cars, many people have doubted whether Tesla has the capital or know-how to become anything more than a niche manufacturer. "Toyota must have conducted substantial due diligence before making this investment," said John O'Dell, senior editor of GreenCarAdvisor.com.
Toyota, meanwhile, gets to tap into Tesla's "coolness" factor--a quality sorely missing from the maker of stodgy Camrys and Corollas--and recapture some of its entrepreneurial legacy. "Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has," said President Akio Toyoda, who has said one reason for Toyota's current quality woes is that the company has grown too big and sluggish. "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."
Odd as it might seem for the world's leading manufacturer of hybrid vehicles, Toyota also has some catching up to do when it comes to fully electric cars. Both Nissan and General Motors plan to introduce plug-in EVs in the U.S. before the end of this year. Toyota, meanwhile, intends to offer a short-range, electric commuter car and a plug-in Prius hybrid in the U.S. in 2012. By teaming up with Tesla, whose current roadster can go 245 miles on a single charge, Toyota said it will have more options. Like other large automakers, Toyota is required in places like California to offer some vehicles that emit little or no tailpipe pollution.
Perhaps even more important, however, is how the Tesla deal helps Toyota politically.
In a surprise announcement the companies said they will cooperate on the development and production of electric vehicles and components, and that Toyota will buy a $50 million stake in Tesla when it goes public in the near future. Tesla also said it had purchased Toyota's former NUMMI factory near Silicon Valley.
The partnership undoubtedly boosts the credibility of Palo Alto, Calif.-based Tesla. Despite lots of hype about its battery-powered sports cars, many people have doubted whether Tesla has the capital or know-how to become anything more than a niche manufacturer. "Toyota must have conducted substantial due diligence before making this investment," said John O'Dell, senior editor of GreenCarAdvisor.com.
Toyota, meanwhile, gets to tap into Tesla's "coolness" factor--a quality sorely missing from the maker of stodgy Camrys and Corollas--and recapture some of its entrepreneurial legacy. "Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has," said President Akio Toyoda, who has said one reason for Toyota's current quality woes is that the company has grown too big and sluggish. "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."
Odd as it might seem for the world's leading manufacturer of hybrid vehicles, Toyota also has some catching up to do when it comes to fully electric cars. Both Nissan and General Motors plan to introduce plug-in EVs in the U.S. before the end of this year. Toyota, meanwhile, intends to offer a short-range, electric commuter car and a plug-in Prius hybrid in the U.S. in 2012. By teaming up with Tesla, whose current roadster can go 245 miles on a single charge, Toyota said it will have more options. Like other large automakers, Toyota is required in places like California to offer some vehicles that emit little or no tailpipe pollution.
Perhaps even more important, however, is how the Tesla deal helps Toyota politically.
First, it softens the public relations blow Toyota suffered in California when it closed the NUMMI factory last month. The plant used to be a joint venture between Toyota and General Motors, but Toyota got stuck with it after GM filed for bankruptcy and a judge terminated their contract. Toyota said it could no longer afford to operate the factory alone.
"Toyota obviously made a wise political move there," said Sean McAlinden, chief economist for the Center for Automotive Research.
United Auto Workers President Ronald Gettelfinger applauded the decision to revive NUMMI, which once employed nearly 5,000 people. "Our union's hope is that this venture will give first hiring preference to former NUMMI employees who are already trained and highly skilled," said Gettelfinger.
"Toyota obviously made a wise political move there," said Sean McAlinden, chief economist for the Center for Automotive Research.
United Auto Workers President Ronald Gettelfinger applauded the decision to revive NUMMI, which once employed nearly 5,000 people. "Our union's hope is that this venture will give first hiring preference to former NUMMI employees who are already trained and highly skilled," said Gettelfinger.
Of course, a few thousand electric cars won't make up for the 400,000 Toyotas and Pontiacs that used to come out of that factory annually under the GM-Toyota joint venture, but it's a start. "The new Tesla factory will give us plenty of room to grow," said Chief Executive Elon Musk, without indicating whether UAW workers would get first dibs on newly created jobs.
Musk said Tesla will ramp up to about 1,000 jobs when it starts production in 2012.
Toyota's deal with Tesla ought to play well in Washington, too, where the carmaker is under siege for its handling of sudden acceleration complaints.
U.S. policy makers have been pushing electric-car technology as a way to reduce the nation's oil use and its dependence on foreign energy sources. By giving a hand up to an American maker of EVs, Toyota is furthering that objective."
Musk said Tesla will ramp up to about 1,000 jobs when it starts production in 2012.
Toyota's deal with Tesla ought to play well in Washington, too, where the carmaker is under siege for its handling of sudden acceleration complaints.
U.S. policy makers have been pushing electric-car technology as a way to reduce the nation's oil use and its dependence on foreign energy sources. By giving a hand up to an American maker of EVs, Toyota is furthering that objective."
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