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Tesla, Toyota Teaming Up to Build EVs in California and Reopen NUMMI

Tesla roadster

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Tesla has been getting plenty of support from major automakers
recently. First Daimler grabbed a 10% stake in the auto startup last
year, and now Tesla and Toyota have revealed that they are teaming up
in California to work on electric vehicles, parts, production systems,
and engineering support. As part of the deal, Toyota will buy $50
million of Tesla’s common stock once the company’s initial public offering is complete. Tesla is also purchasing New United Motor
Manufacturing Inc. (NUMMI), Toyota and GM’s recently closed
manufacturing plant in Fremont.

Toyota’s California manufacturing
operations have been dormant since April, when the company shut down
production at NUMMI, which employed 4,700 workers. The plant had been
open since 1984 and it produced almost 8 million vehicles. Now Tesla
says that it will use the site–along with 1,000 factory workers (some rehired from NUMMI)–to manufacture its upcoming Model S sedan,
set to be released in 2012. The startup chose the site because of its
extensive automotive production infrastructure. And once production ramps up, Tesla could employ up to 10,000 workers.

The Tesla/Toyota
partnership will provide benefits for all those involved. Tesla could use the cash infusion to pay for
equipment and factories. The company can also get some much-needed
expertise on the auto business from Toyota, which has been around since
1937. At the same time, Toyota can use some good press after its brake safety fiasco
earlier this year. Toyota might also learn from Tesla’s production of
all-electric cars–up until now, Toyota has stuck with hybrids. And
California gets a boost to its growing credibility as an electric vehicle hotspot.

Most
importantly, this might just mark the beginning of electric cars going
mainstream. Toyota is already known as a leader in the hybrid vehicle
space, so it has a head start on other automakers. And Tesla has the
reputation for building sleek, well-made electric cars. Put the two
together to mastermind EVs, and who knows what could happen?

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About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more.

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