Toyota partners with Tesla Motors on EV development, production

May 21, 2010 11:19 AM

Toyota has formed a partnership with Tesla Motors, taking a $50 million stake in the electric-car builder and promising cooperation on vehicles, components, and production. Telsa has purchased the former NUMMI factory in Fremont, California, that had long served a cooperative venture between Toyota and General Motors.

NUMMI had been producing Toyota Corollas and Tacomas up until this April. Tesla will use the factory to build the upcoming Model S sedan and future Tesla vehicles. The facility is capable of producing 500,000 vehicles a year. Tesla has delivered more than 1,000 electric Roadsters worldwide. (See our Tesla Motors Roadster model overview page, available to online subscribers.)

"Through this partnership, by working together with a venture business such as Tesla, Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has," said Toyota President Akio Toyoda in a released statement. "Decades ago, Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that 'venture business spirit,' and take on the challenges of the future."

The partnership gives Tesla legitimacy and greater resources to help it grow and survive in the increasingly competitive electric car market. Perhaps the arrangement can even help Toyota gain some mojo.

For more information on alternative fuels, see our guide. For tips on saving fuel, check out our guide to fuel economy.