Electric car company Tesla Motors has received a commitment from Toyota to buy $50 million of its common stock when Tesla goes public. Toyota and Tesla are also teaming to re-open the old GM-Toyota plant in Fremont, California.
In January, Tesla filed for an IPO to raise $100 million, but hasn’t yet set a date.
Given the market conditions and the uncertainty around how long it will take for electric cars to be viable in terms of charging networks and citizen acceptance, the IPO may be exciting and will certainly be highly visible, but not necessarily financially rewarding in the short run.
Toyota joins a list of prominent investors in Tesla including Germany’s Daimler, the Abu Dhabi government, and venture capitalists such as Steve Jurvetson.
Tesla closed a $465 million loan from the Department of Energy in January to build a manufacturing plant for the Model S.
The NUMMI factory produced Toyota’s Corolla and Tacoma vehicles, and GM’s Pontiac Vibe. It is one of the largest, most advanced automotive production plants in the world.
Toyota closed the 25-year-old plant on April 1 after GM pulled out of their joint venture last year during its bankruptcy. Toyota laid off 4500 workers.
The plant can produce half a million vehicles a year or approximately 1% of total worldwide car production, Tesla said. The award-winning plant was the birthplace of the vaunted Toyota Production System, a widely copied system that is said to have created quality improvements, manufacturing flexibility and worker satisfaction.
Tesla plans to hire about 1,000 workers to build its Model S sedan and future Tesla vehicles, and may electrify a Toyota vehicle.
“The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system,” said Tesla CEO Elon Musk. “The new Tesla Factory will give us plenty of room to grow.”
For 2009, Tesla reported $112 million in revenue and a loss of $56 million – its total loss to date is $260.7 million. It sold a total of 937 Tesla Roadster electric cars as of Dec. 31, 2009.
It’s planning wider production of its Model S sedan – it has a target of 20,000 cars a year starting in 2012, priced under $50,000.
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