Last Updated May 21, 2010 6:01 PM EDT
Schwarzenegger got it wrong, anyway, and his wish fulfillment about having everything based in California influenced a lot of the coverage. Tesla's Ricardo Reyes told me that the Model S--Tesla's coming fast electric sedan -- will definitely be built at Tesla's newly acquired factory (the huge NUMMI facility in Fremont). But there's no guarantee that any car coming out of the Toyota/Tesla collaboration would also roll out there.
The deal, which includes a $50 million Toyota investment in Tesla's as-yet unissued common stock, works because both sides have vulnerabilities that could be addressed by the collaboration:
- Tesla is untested in volume production. Tesla has sold more than 1,000 Roadsters, which is certainly success of a sort. But until now, Tesla has been building cars pretty much to order, with only a vestigial dealer network. Toyota is the biggest carmaker in the world, with highly expert operations all over the world.
- Toyota has been slow to get into electrics. The company has a small urban electric vehicle on the books, and a legacy of battery cars in the 1990s. More recently, though, it seemed to hesitate while Nissan plunged ahead, and has been mightily distracted by the recalls. This agreement shows Toyota to be a player again in a field it is increasingly realizing is at the heart of tomorrow's auto business.
- Tesla needs the cash. The $50 million doesn't mean much to once-again profitable Toyota, but it's vital to Tesla, which has only briefly made a profit. And speaking of money, Tesla has a pending IPO and the collaboration, whatever comes out of it, gives the company much more credibility in the markets.
- NUMMI gives Tesla elbow room. NUMMI in its heyday was a symbol of lean automaker cooperation, producing the Corolla and Tacoma until last April (and many GM-branded vehicles over its colorful history). It's gigantic, with the capacity to produce 500,000 cars a year, and Tesla will use only a corner of it for the next couple of years at least. But the company envisions a third generation car, smaller and much more affordable, once the Model S is out the door. And that one will likely be built at NUMMI.
The deal, still flopping around on the decks of world commerce, has gotten analysts wondering who's getting the better end of it. And the consensus, in line with my own conclusions, is that it could be a win-win.
"Large companies tend to have a fairly rigid culture that is slow to change," said Phil Gott, managing director of automotive consulting at IHS Global Insights. "But entrepreneurial companies like Tesla are pragmatic and solution oriented. The big companies have well-honed processes in place for building cars from the ground up, and Tesla has none of that. It's an opportunity for them to learn from each other."
Craig Giffi, vice chairman and leader of the U.S. automotive industry group at Deloitte LLP, also likes the "win-win" concept. "I think it means there's a growing opportunity in electric vehicles, and smart OEMs are hedging their bets and looking for ways to stay ahead of the curve. But for Tesla, the potential is a bit more obvious than it is for Toyota. But Tesla does have the real-world experience of dealing with electric vehicle customers. General Motors and Nissan will have that shortly from their new car introductions, so customer management information could be very valuable to Toyota as it moves forward."
Photo: Jim Motavalli