The Truth About Toyota And Tesla

Bertel Schmitt
by Bertel Schmitt

A lot of people have been shaking their heads at the Toyota/Tesla deal. Was it just an elegant way to unload the NUMMI plant? As in “here are $50m, please buy my plant with it?” Or is it part of a grand strategy, the beginning of Toyota’s foray into an all-electric future? As usual, the truth is stranger than business plans.

Akio Toyoda is a car guy. He drives around 200 different cars a year. That’s a different car every other day or less. If he wouldn’t be the scion of the world’s largest car company, Toyoda would count as a car otaku, as they say in Japan to a car nut. He has his own race team, Team Gazoo. Even blogs on the team’s website. The team fields two Lexus LF-A, and makes a regular appearance at the 24 Hours Nürburgring endurance race. This year, Toyoda officially did not race. Officially. Folks who were at the Ring last weekend swore they saw, at a minor event, a little Japanese guy with glasses behind the wheel of an LF-A. I know, they all look alike. But I have it on good authority that it was Akio Toyoda, who just couldn’t help it.

What does this have to do with Tesla? About a month ago, “Mr. Toyoda mentioned to one of our engineers that he would like to drive a Tesla roadster,” said Paul Nodasco, spokesperson at the Toyota HQ in Tokyo, to TTAC. A visit and a test drive was quickly arranged. If you listened to Toyoda’s remarks during the announcement, you heard him say that “during a visit here earlier this spring, Mr. Musk kindly gave me an opportunity to drive one of Tesla’s electric vehicles.” That was the polite version of Toyoda’s desire to get behind the wheel of one of the rare electro-cars, and Musk jumping to the occasion and into the passenger seat.

As the Remington Razor tag line goes, Toyoda liked the roadster so much, he bought the company. Well, part of it. How big a share Toyota got for their $50m has not been announced. Toyota sees the engagement as a typical venture capital play: If it works, it will pay back in droves. If it doesn’t, what are $50m? About three fines to the DOT, going to a worthier cause. At the announcement, Akio Toyoda recalled that “decades ago, Toyota was also born as a venture business, and grew over the years.”

According to sources at Toyota, any speculations about future cars are just that, speculations. Between the test drive of the roadster, and yesterday’s announcement were just a few weeks, barely enough time in the corporate world to process a purchase order for a load of hanging file folders. Any cars or technologies will be jointly bred by a team of Toyota and Tesla engineers. Up to now, the thinking in Toyota city was that plug-ins are city-mobiles at best, for people who don’t stray too far from the charger. They may want to find out whether the concept can be taken a bit farther. Or further.

Moral for car dealers: Never turn down the request for a test drive.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Ajla At $22K to start it might have some legs. At $34K I don't know why they are bothering.
  • Redapple2 Love the styling of the amazon delivery thingy.
  • Dukeisduke One of the stories in today's Autoline Daily says Rivian could run out of cash in two years (they've got $7.8b in the bank now, and burned through $3.7b last year.). They've got to get to scale on the R2 to turn a profit. Remember, Tesla lost money for ten years, then finally got to scale with the Model 3.
  • Oberkanone Sign me up for the Abarth 500 EV with 250 miles range and sub 5 second 0-60 mph with MSRP of $24,999.$34,095 for 150 miles range. Ridiculous. Stand alone showrooms in USA for FIAT and Alfa. What a ginormous waste of capital.
  • Dave M. I'd bet they'd sell more if they ditched the L'il Orphan Annie headlights....