By on May 20, 2010

The San Francisco Chronicle is reporting that California Governor Arnold Schwarzenegger has said that Toyota will team up with Tesla to “build electric cars in California.” The governor made this shocking revelation at Google’s I/O Conference today, and told reporters [via the Sacramento Bee]

Today is a very exciting day for me because … I am also going over to the Bay Area to talk about Tesla and Toyota forming a partnership, where they take one of the Toyota cars and make them electric. And again, they’re going to do that here in California.

The obvious scenarios involve joint manufacturing at Toyota’s former GM joint-venture plant NUMMI in Fremont, CA, although there has been no confirmation of these or any other details yet. [UPDATE: According to, a Downey, CA city councilman
confirms that Tesla will build the Model S at NUMMI. The Downey City Council had planned to approve a lease deal for a Tesla factory site, but Tesla CEO Elon Musk called to announce that his firm would be setting up shop at NUMMI]

Daimler is Tesla’s only current OEM partner, and it would have right of first refusal on any acquisition offer made for the California EV firm. Cooperation was focused on an EV version of Daimler’s fading Smart city car. Tesla was briefly mooted as a homegrown savior for NUMMI, which Toyota moved to wind down after GM abandoned the JV in bankruptcy last year (production there ceased on April 1 of this year). That suggestion was emphatically rejected by Tesla, for the simple reason that

we need about 500,000 square feet for our plant. NUMMI is 5 million.

Tesla has been expected to announce a production site for its Model S sedan, widely speculated to be located in Southern California. Consideration of a brownfield site in Downey, AC had previously drawn protests, casting Tesla’s 2011 Model S production schedule into doubt.

As the industry leader in hybrid technology, Toyota has always been wary of rushing plug-ins to market, particularly lithium-ion batteries. A plug-in Prius has been tested and talked about for ages, but Toyota’s timeline for series production has always been conservative, especially compared to Nissan’s Leaf and GM’s Volt dashes. Even recent test drives of pre-production Prius PHEVs don’t mention sale dates or prices.

But Toyota’s lithium-ion partnership with Panasonic is clearly the key player here. Though Toyota doesn’t seem keen to make the li-ion leap, Toyota-Panasonic is close to a deal to supply batteries to the now Ford-less Mazda. And look at that: Tesla and Panasonic recently inked a cell-supply deal. This might be starting to make some sense…

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15 Comments on “BREAKING: Toyota And Tesla Partnering On EV?...”

  • avatar

    This will be another blow to Toyota when Tesla “vaporizes”

    • 0 avatar

      I seriously doubt Tesla will vaporize anytime soon.  With government backing, Tesla was even ‘helped’ to get a too-good-to-be-true deal on the NUMMI factory which value was listed at $1 billion USD.  Strange how all the Toyota recalls kind of vanished after the deal was inked in May 2010 and Toyota ‘agreed’ to invest in Tesla.  The oil companies have gotten too big and wiley for the US government to push around, so they are looking for ‘new partners’ to button up their government pensions and investment portfolios.  Taxpayers need to get the career politicians out because they are what is really ruining our country.  Vote for new blood in November!!!!  Do a write in name of Superman if you want – just do not vote for business as usual!!!!! 

  • avatar

    The end product will be a car that suffers from battery overheating and sudden acceleration while having hyperinflated mileage claims and priced at Porsche levels…

    and being no better for the environment than the local e-power plant.

  • avatar

    Toyota makes reliable, boring cars. Tesla’s core competency is the electric powertrain. I see no downside here.

  • avatar

    I’ll bet the tooling for the Vibe is just sitting there waiting to be used for something useful.

  • avatar

    This looks to be win-win. Let’s see what they come up with before spoiling their cheerios.

  • avatar

    I’m not sure what Tesla has to offer. It seems to me that the Nissan Leaf renders all of these EV start-ups useless. If they have such great technology, then why haven’t they made anything that can match the Leaf yet?

  • avatar

    Lets connect the dots:

    -> Tesla used batteries from Sanyo

    -> Panasonic buys Sanyo

    -> Tesla announces batteries will be supplied by Panasonic-Sanyo

    -> Toyota and Panasonic are close partners for battery technology

    -> Toyota Tsusho strikes a deal to secure lithium from Argentina

    -> Toyota strikes deal with Canada’s Great Western Minerals Group for rare earth metal supply (used in motors)

    -> Toyota enters into an agreement with the government of Vietnam to explore and develop the rare earth elements deposits at Dong Pao in Vietnam.

    -> Ton of US tax rebates and government support is offered for EVs.

  • avatar

    Questions I have:

    1.) What is actually going to built in NUMMI? Cars? Batteries? Both?

    2.) Will Tesla use a Lotus platform (being that the Tesla-Lotus ends in 2011)?

    3.) Will Tesla use an Mid-engine Toyota platform? Being that Toyota has recently showed a 400ps hybrid-MR2/Volta revival that is rumored to be a completely new platform.

    4.) What car is Toyota planning on building? The EV version of the IQ (FT-EV)?

    4.) UAW? Will this plant be run by Tesla or Toyota? Who gets stuck with the UAW?

    5.) How much taxpayer money is sunk into this? Cali doesn’t have much to spare these days…

  • avatar

    I believe this is an excellent move for both, Tesla and Toyota, for their products and for their image. As Akio Toyoda said this will also be an opportunity for Toyota to learn (or relearn?) about quick decision-making and flexibility. Yes, that’s a quality companies forget about when they grow large.
    GM closed this plant being inefficient, and 25 years ago it was reopened with the help of Toyota. GM being out of the picture this year, Toyota was forced to close the plant and just months later will open being acquired by Tesla. Interesting history.
    I hope they will succeed, this being a good move for the California economy during a time when lots of jobs go oversees.

  • avatar

    @Edward Niedermeyer

    I’m sure the meaning of the pic is “this news crushed down unexpectedly” even if it could be interpreted “this partnership will be a total loss”.

    There are posts for which you deserve an award for the pics selection.

  • avatar

    Awesome move for Tesla.

  • avatar

    I love the picture. You could add to the caption: Volkwagen attempts to reassert itself as #1 automaker over Toyota in the meantime.

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