Toyota plugs into Tesla’s electric dream
Today’s announcement that Toyota is set to join forces with electric supercar maker Tesla has come as a surprise to many, but probably not to those who have had a close eye on the industry of late.
Toyota is acquiring a $50 million stake in Tesla and the two firms will cooperate on developing electric vehicles, parts and production systems and engineering support.
This arrangement seems to be something that very much suits both parties. On one side, Tesla, the Californian-based electric car manufacturer has been in the press for making what are without doubt the most impressive electric vehicles to date, offering supercar performance and state-of-the-art battery technology in a supercar body style, with the promise of a stunning Model S sedan to come.
However, they are struggling financially. The firm has sold 1,000 Roadsters but lost $230 million dollars in the process and desperately needs to generate funds. This €50 million, along with a government loan of €465 million should help, but they will also no doubt be able to tap into Toyota’s undoubted expertise when it comes to manufacturing. With the Model S due to begin volume production in 2012, with no experience of large volume sales and 2,000 orders in the book, Toyota will no doubt make the process easier, faster and probably cheaper too.
Tesla is buying one of Toyota’s recently closed manufacturing plants in San Francisco, which has a capacity to build 400,000 vehicles a year and this should make the target of producing 20,000 Tesla S sedan’s all the easier.
But it isn’t just one-way traffic. Toyota stands to benefit greatly from the deal. Because while rivals Nissan and Renault prepare to enter the market with full electric vehicles within a year, Toyota is still pedalling hybrid. And worthy as it is, their new plug-in hybrid Prius, which has a range of 20km on EV mode only, won’t go on sale until 2012. Nissan-Renault took a gamble on full electric vehicles, which looks like it might pay off and as a result, Toyota is lagging behind in the electric vehicle race.
Toyota could, we presume tap into Tesla’s undoubted skill in battery technology to get back into the running and perhaps introduce full electric vehicles faster than anticipated. Perhaps this was an attack of nerves by the Japanese giant? Either way, it seems that they are ensuring that they don’t get left behind after what has been an annus horribilis for Toyota.
What is also does for Toyota is to tap into a brand which are seen as sexy, exciting and marketable and that is something that nobody would accuse Toyota of these days. As they patch up their reputation after a litany of reliability and safety concerns, which continued this week with a recall of their flagship saloon, the Lexus LS model, having access to this emerging brand with have the marketers and browbeaten PR department salivating.
The Tesla S saloon, for example could be re-badged as a Lexus, and how about a Toyota MR2 EV, a re-packaged Tesla Roadster? Once again, Toyota could give us future-proof, exciting sports and luxury cars.
This deal should be a winner for all involved. So perhaps we shouldn’t be all that surprised after all.