By on June 12, 2010

When Toyota announced their share purchase / NUMMI deal with Tesla, the greenies rejoiced, the skeptics said it’s just an elegant way to unload NUMMI. Toyota said they are mildly interested in Tesla, in a venture capital kind of way. As in: here is some money and a factory we no longer need. Would be great if something comes of it. Well, they will actually build a car together. Not the Model S as many thought. Let’s not get ahead of ourselves. Let’s build a prototype first.

Toyota told The Nikkei [sub] that they will build an EV prototype together with Tesla. The mule should be ready this year. And it won’t be anything fancy. The prototype will be based on a current Toyota model and use Tesla’s lithium-ion-battery-based system. If it works, the winner will be Toyota: By using Tesla’s technologies, Toyota could lower the cost of its future electric vehicles, a Toyota executive said to the Nikkei.

Get the latest TTAC e-Newsletter!

23 Comments on “Finally: Toyota And Tesla Make Something With Wheels...”


  • avatar
    Daanii2

    Trouble is, Tesla has no technology. Take a look at their patents and patent applications. They are laughable. All Tesla had is Martin Eberhard’s big idea — break into the market with a premium product, and then move down to mass market.

    We’ve seen how well that worked. It didn’t. All Tesla is now is a flamed-out startup surviving on government dollars. Their only product, the Tesla Roadster, goes away soon. Having sold so far less than 1,000 cars.

    Don’t get me wrong — people are going to get rich off Tesla (Elon Musk, for one). Just like so many wind company investors whose wind turbines spin abandoned here in California. But all the money they get will do nothing to help the taxpayers who paid for it.

    Toyota should stay away from Tesla. There’s nothing there for them. Nothing.

    • 0 avatar
      Robert.Walter

      What do you mean by “abandoned”?

      I recall driving out to Palm Springs about 10-years ago and being very impressed by the (must have been) thousands of wind turbines in the desert there …

      All this time, I thought they were generating “green” electricity and a return for their investors…

      What gives?

    • 0 avatar
      charly

      Selling a 1000 cars makes them probably the most successful new western car maker since Lamborghini.

      ps. i Don’t see why Lotus stopping production of the elise would lead to Tesla stopping their roadstar as elise production numbers isn’t that much higher and the engineering costs are already paid for.

    • 0 avatar
      Daanii2

      There are 14,000 abandoned wind turbines in California. Bought and paid for, principally, by taxpayers. A few people made a lot of money off those turbines. Once they had milked the subsidy teat dry, they moved on to something else. The wind turbines they left behind.

      On the other hand, there are the same number of still operating wind turbines in California — about 14,000. Very, very few of them are over 10 years old. They do deliver some power, some of the time. But they are only kept alive by subsidies. Without subsidies, they would be dead.

      On balance, wind power doesn’t work. Balancing the costs against the benefits, the costs weigh much more heavily. Some people point to Denmark, Spain and Germany as examples to follow. But following those countries’ examples would be foolhardy. They have been failures.

      Turning back to the topic here, sure Tesla has some technology. They have a product. The Tesla Roadster, in fact, is the first modern production battery-electric car. That’s quite an achievement.

      But balance the money Tesla has spent (and continues to spend) with what has been achieved. Small benefits, huge costs. In business terms, Tesla has failed.

      In political terms, though, Tesla has succeeded. Politicians point to benefits achieved. Cost is ignored. Just think of the stimulus package of last year — a stunning $700 billion spent on the hope that it will stimulate the economy (it doesn’t seem to have done) and keep unemployment below 10% (it didn’t).

      If you think like a politician, you’ll love Tesla. Just like politicians love wind power. And stimuli.

      If you think like a businessman, you’ll see Tesla as a scam. I hope Toyota comes to its senses.

    • 0 avatar
      Daanii2

      charly, Tesla has already announced that Tesla will discontinue the Roadster when Lotus stops making the Elise. Why would they do that? I don’t know. But they did.

      For me, it’s hard to imagine that Tesla is trying to go public when they have announced the end of life of their only product. But that’s Elon Musk chutzpah for you.

      And yes, 1,000 is a fair number of cars. But Tesla has already burned through $236 million. That’s a $236,000 loss per car. Not exactly a smart business plan.

    • 0 avatar
      jeremie

      Daanii2,

      Your assertion that wind power is a failure is debatable and premature. As to the matter at hand, Tesla is most certainly a joke. In both cases, the trendy politics of renewable energy will sooner or later hit the wall of economic reality. That fossil fuels are a finite resource is a fact. Switching to renewable energy is going to a long, painful and expensive process. It’s also a necessity. I would be a lot more upset about the credits and incentives if not for the breaks oil companies have received for years, and their despicable behavior.

    • 0 avatar

      Tesla has no special technology. What they have is a (small) first-mover advantage and a brand with some value, which might (or might not) spin them enough $ out of their IPO to do something real. Toyota’s investment pays for itself as a PR move and as an option to get back into the NUMMI plant, even if they never do anything real with Tesla.

  • avatar
    Conslaw

    How much technology Tesla has depends upon how you define technology. If you limit yourself to proprietary technology, well the answer is “not much”. If you talk about simple know-how and experience with engineering road-going electric vehicles, then the answer is “quite a bit”.

    In the grand scheme of things, Toyota isn’t venturing much, and it has a lot to gain. From Tesla’s standpoint, this is a good time in its operation to have a big brother with deep pockets. It’s potentially a win-win relationship.

  • avatar
    The Walking Eye

    Hybrids were a nothing to be gained thing back when Toyota started developing the Prius and now they own that market. As conslaw mentioned, Toyota gains the expertise of Tesla’s engineers which is very valuable in itself.

    This is the type of investment we need large companies to make. They have the funds to explore this kinda thing and can take the hit financially if it doesn’t work out. I may not like Toyota’s cars or the group-think within the company ranks, but I admire them for taking these kind of risks when it flies in the face of conventional economic wisdom. They’re looking to the future and not for purely maximizing short-term profits. I think there’s plenty to be gained by both parties.

    • 0 avatar
      Daanii2

      “Toyota gains the expertise of Tesla’s engineers which is very valuable in itself”

      What engineers are you talking about? That’s the problem. Lotus builds the Roadster. Tesla’s drive train technology came from AC Propulsion. Elon Musk is the Tesla “chief architect,” believe it or not. Tesla just took off-the-shelf technology and put it together. How is that going to help Toyota?

      Just like Dell in computers, Tesla is a marketing play, not a technology play. Toyota’s own engineers have forgotten more about building a car like the Tesla Roadster than Tesla’s “engineers” ever knew.

  • avatar
    FDR

    So Daani, wind power is such a failure? In Denmark -a well run country- they’re aggressively pushing to get 40% of their power from wind in a few years. Being an addict to fossil fuels while turning a blind eye to their hidden costs is unwise. It’s also unwise to spend your national treasure importing massive amounts of oil. You’re coming at your conclusions from a political perspective.

    • 0 avatar
      Greg Locock

      I suggest you check out the real state of wind energy in Denmark, not the PR version. It only works because they can export spare energy to, and import spare energy from, France and Germany (nukes and brown coal respectively).

  • avatar
    Adamatari

    Daanii2, have you not noticed the huge oil spill in the Gulf of Mexico? Or the billions of people in China and India that are hoping to buy cars? You think oil and fossil fuels are cheap. They are, at the moment, but like any finite thing with very large demand they won’t be for very long.

    Nuclear is a possible bridge, but it’s expensive, also very, very dangerous (any tech where the 1 in a million accident is Chernobyl is dangerous). Wind, solar, and other renewable sources are going to have to come online or we’ll all be on a starvation energy diet in the future. It will cost trillions over decades to develop and install the capabilities. The US now spends a trillion a year on the military and war funding. It can be done.

    Toyota is betting on the future. So far, their bets have paid off pretty well. I’d back the brains at Toyota against you any day of the week.

    • 0 avatar

      If you think of replacing fossil fuel and nuclear with wind, solar and hydroelectric, then better get used to walking.

      For a while, I lived in an off-the-grid house on Maui, with a very expensive solar installation, shacks full of batteries, and it was a chore. No A/C. Washer/dryer on sunny days. After a few cloudy days, it was back to fossils: The (big) diesel generator in the shack up the hill sprang to life.

      Sure its possible. Want to go to Hong Kong? A matter of a few months by sailboat. New York-LA? Two weeks by steam train? Wait – fossil fuels again.

    • 0 avatar
      newcarscostalot

      He has a point. Much, if not all, of our economy and the products we use rely on fossil fuels. We need to change this or we are going to be in a world of hurt.

  • avatar
    GS650G

    It’s hard to beat the calories per gram from petroleum with anything else. Even with laughably low efficiency oil powered devices produce lots of power.

    Electric cars are too expensive to be a justified alternative to oil and come with lots of asterisks like range, durability, repair skils, and performance. And most are butt ugly aero boxes that only a mother could love, the Telsa being an exception if you dig Lotus designs.

    The last reason left to own one that can’t be argued with is love for the environment. Provided fossil fuel isn’t used to make the car then you have smug bragging rights but we all know Black Gold is used extensively to make anything, even wind turbines. Maybe if we made them from cow chips, rocks and driftwood.

    It seems we are in a problem without a solution, I’m going to ride my bicycle and try not to worry about it.

  • avatar
    Daanii2

    Interesting discussion. We are, of course, not going to solve the problems of the world by posting on this website. Still, it’s good to see a range of opinions on problems and solutions.

    I’m looking forward to seeing what the future brings.

  • avatar
    Adamatari

    Bertel,

    I am not unaware that there are serious obstacles. I am also well aware that energy dense fuels will remain necessary to power airplanes, ships, and trucks. The question is whether we get them from the ground or whether we make them another way. I think by now we all know the litany of issues with fossil fuels, and if we don’t we can turn on the TV and see part of the issue quite clearly.

    Electric CARS, however, are doable. They are at the development stage comparable to something like a 1930s car, though. The IC engine has been worked and reworked to it’s modern high development, while electric cars have not seen anywhere near the same invested time, money and R&D.

    Hawaii has a certain set of issues when it comes to energy. The demand there is higher than can easily be met by local sources. There is geothermal on the Big Island, as well as at least two places where wind farms have been put up. Wave energy is another possibility in the future as well. Unfortunately, Hawaii is far away from everywhere and so to import energy it must import fuel. On the North American continent, the issues of land space and remoteness don’t exist in the same way. For example, the ideal places to put solar installations are in Arizona and New Mexico. There is plenty of land, even after you cross out protected areas and such. Transmission to other states can be easily done.

    Also, having no A/C in Hawaii is not ideal, but it’s hardly what I call a terrible sacrifice (of course depending on where you are and how well the house is designed). I can live with that, and in fact I did for several years.

    Overall, the biggest obstacle is that we have spent trillions and decades on oil, so it’s cheap and we know what to do. It will take the same for other fuels and energy sources.

    • 0 avatar
      Steven02

      No A/C in Hawaii, not that bad. In Texas, a must. Need heat up North as well. The problem also becomes what do you use if it isn’t fossil fuels. Solar power in AZ and NM, might be good for CA, NV, and TX, but not to places further away.

      Unfortunately, the obstacles to other sources are quite large. I am all for using less fossil fuels, but right now, I simply can’t.

  • avatar
    NickR

    Well, at least the Tesla is closer to fruition than this supercar:

    http://www.cnn.com/2010/WORLD/europe/06/08/first.matching.superyacht.supercar/index.html?eref=igoogle_cnn

    Maybe.

  • avatar
    probert

    @Daanii2

    You’re just making things up.

    Tesla makes fantastic electric cars by cleverly utilizing existing tech with proprietary tech, wind power is generating electricity all over the country, and the largest subsidies go to big oil. What’s your point.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • J & J Sutherland, Canada
  • Tycho de Feyter, China
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India