The Audacity Of Startups: 8-Person EV Firm Targets NUMMI

The former GM-Toyota joint-venture known as New United Motor Manufacturing Inc (NUMMI) in Fremont, CA is a big plant. Its nearly 5,000 employees can churn out over 400,000 compact cars and pickups in a year when operating at full capacity, which of course it hasn’t been for some time. With GM leaving the joint venture during bankruptcy, and Toyota currently winding down the remaining operations, those 4,700-ish employees and their 5.3m square foot plant need work. Local media call their outlook “gloomy,” noting that semiconducter workers will be first in line for the few new manufacturing jobs in the area, with a solar panel firm. But, in keeping with the green revival theme, an electric vehicle startup called Aurica says it’s in negotiations to take over NUMMI, where it says it will build unspecified EVs, in a venture that currently has an “undisclosed” finance plan. Are we buying this? Let’s look at some numbers.

Current Aurica employees: 8

Current NUMMI employees: 4,700

Current Aurica payroll: Unknown

Current NUMMI payroll: $580m/year

Approximate cost to switch NUMMI production to a new model: $500m

Estimated funding needed by Aurica: $1b

Approximate price of current NUMMI products: $15k+

Approximate price (estimated) of Aurica products: $40k+

Let’s put it this way: Barack Obama has pledged that there will be 1 million plug-in vehicles on the road by 2015, and has granted retooling loans and other federal support for projects like Nissan’s Leaf and Chevy’s Volt. The idea that NUMMI’s 500k unit capacity could be used to build EVs “within two years” as Aurica’s reps suggest, is laughable… especially considering that the $40k+ EV market already has a healthy number of contenders. The fact that Tesla was level-headed enough to recognize that NUMMI is way too big for even their outsized ambitions says everything you need to know about Aurica’s NUMMI plans. Or, to quote NUMMI spokesfolks:

While we appreciate their interest in NUMMI, there has not been an opportunity for productive discussions with Aurica. We are not sure whether their proposal is viable

Ya think?