Tesla Motors Inc. is buying the recently closed New United Motor Manufacturing Inc. (NUMMI) plant in Fremont, Calif., and plans to manufacturer its forthcoming Model S sedan there. The cost of the property and details of Tesla’s plans to retool the plant for manufacturing electric vehicles are not known.
In addition, the Palo Alto, Calif., automaker and Toyota Motor Corp. announced that Toyota is investing $50 million in Tesla Motors Inc., and the two companies plan to develop new models together.
NUMMI was a joint venture of General Motors and Toyota that produced cars at a former GM plant, from 1984 until April of this year. GM exited the venture in June 2009, leading Toyota to close the plant.
According to Tesla, the Fremont plant has the capacity to produce 500,000 cars/year. It plans to produce its Model S there, the “first pure electric premium sedan,” which it has forecast to sell for $49,900 (including a federal tax credit) which will be introduced in 2012.
"The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system," stated Tesla CEO Elon Musk. "The new Tesla Factory will give us plenty of room to grow."
Tesla’s current model, the $109,000 Tesla Roadster electric sports car, is produced in England by Lotus Cars.
The Toyota investment may be critical to Tesla’s progress: it is planning an initial public offering and has said it hopes to raise about $100 million, but investors may be wary of an upstart luxury electric vehicle manufacturer with no history of profitability, and a high-cost, unproven product.
Toyota is buying $50 million of Tesla’s common stock, in a private placement prior to the IPO, and together to companies plan to develop new electric vehicles, parts, and a production system.
"I’ve felt an infinite possibility about Tesla’s technology and its dedication to monozukuri (Toyota’s approach to manufacturing)," stated Toyota president Akio Toyoda. "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. 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."