Tesla and Toyota

The question of whether Tesla Motors is a “real” car company rather than something that is merely a low-volume producer of products for rich people, sort of like an atelier for electric cars, seems to have been unambiguously answered yesterday with two moves: Tesla has purchased the former GM-Toyota joint venture New United Motors Manufacturing Inc. (NUMMI) in Fremont, California, with the objective of producing the Model S sedan and other vehicles in the plant.

The question of whether Tesla Motors is a “real” car company rather than something that is merely a low-volume producer of products for rich people, sort of like an atelier for electric cars, seems to have been unambiguously answered yesterday with two moves:

Tesla has purchased the former GM-Toyota joint venture New United Motors Manufacturing Inc. (NUMMI) in Fremont, California, with the objective of producing the Model S sedan and other vehicles in the plant. This plant was the production site for the Pontiac Vibe, Toyota Matrix, Toyota Corolla, and Toyota Tacoma before GM got into its financial troubles and had to jettison Pontiac and its commitment to the venture. During its period of operation, Toyota, in effect, managed the production operations. The plant has a production capacity of 500,000 units per year, and while there is no indication that we’ll be seeing that many electric vehicles—Teslas or all others combined—anytime soon, clearly buying a factory means that these folks are serious. Fremont, by the way, is just east of Palo Alto and Menlo Park—a.k.a., Silicon Valley. Tesla CEO Elon Musk commented, “The new Tesla Factory will give us plenty of room to grow,” and noted that the factory “effectively leverages an ideal combination of hardcore Silicon Valley engineering taken, traditional automotive engineering talent, and the proven Toyota production system.” Which leads to the second move:

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Tesla Motors and Toyota Motor Corp. announced a cooperative agreement wherein they will cooperate on the development of electric vehicles, parts, and both production system and engineering support. Toyota is purchasing $50-million of Tesla’s common stock. Toyota’s plans to introduce electric vehicles in the market by 2012 certainly gets a jolt of energy from this. Commenting on Tesla, Toyota president Akio Toyoda said, “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.”

Arguably, when Toyota Motor Corp. was established in 1937, some questioned whether it was a “real” car company, too.