The False Toyota-Tesla Partnering
The news Toyota was taking a $50 million position in Tesla Motors sent waves through the auto world. A closer look at the deal quickly put the kibosh on the excitement.
Tesla Motors is the child of Elon Musk. The company has produced what are undoubtedly the most impressive electric cars every produced. The Tesla Roadster is a classic sports car in every sense with the one rather large exception being that it is an electric car. Sales are brisk, but the company is too small to do a mass market release because of a lack of funds.
Toyota has long been the dominant force in the hybrid market. While it has show more caution in relation to the electric car niche, the marriage of Toyota and Tesla seems like a no brainer. The news that Toyota was going to buy $50 million in Tesla stock seemed to foretell a future of high performance electric cars that would have consumers lining up in the streets surrounding the dealer to plunk their hard earned cash down. Unfortunately, this is not the case.
Instead of a perfect union, the Toyota and Tesla effort is a wink-wink affair. Tesla is nearly out of money. Toyota has had a flood of bad publicity. Less well known is the fact the company has also made a bad political mistake as well. It had co-owned the Nummi auto plant with GM, the only auto plant in California. GM bailed on the deal during its bankruptcy and Toyota eventually closed the plant. This was met with a very cool view by California politicians and Toyota was looking for a way to backpedal.
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Well, you can probably see where this is going. Tesla will be building new cars at the Nummi plant. In fact, it has agreed to buy the plant from Toyota for $42 million. This is binding on the company only if it can do a public offering to get its stock on the exchanges. If it pulls it off before December 31 of this year, Toyota will then buy $50 million in stock. Tesla will then apparently buy the plant for $42 million, netting it $8 million. Confused yet?
The transparency of this mess is easy to see when focusing on one thing in particular. The companies have specifically stated that they will not be developing electric car technology together. Yes, you read that right – NOT working together.
Ah, it looked like such a good match at first!