Toyota and Tesla: A Perfect Partnership?

Tesla Model S

Tesla Model S

Toyota Motors recently announced that it will invest $50 million in electric-car maker Tesla.

What would the world’s most successful auto company get from investing in a relative startup? Well, there are a couple different ways of looking at this new partnership:

At first glance one might think that $50 million could fund Toyota’s own EV research without having to throw money at an unstable new company.

Looking a little deeper, it could just be a loan of sorts… a way for Toyota to unload its New United Motor Manufacturing, Inc., plant in Fremont, California. (As in, “Here are $50 million, buy NUMMI with it.”)

Swartzenegger with Elon Musk and Akio ToyodaTesla CEO Elon Musk said that his company will indeed buy “a small portion” of NUMMI to produce the new Model S sedan and hopes to expand in the future.

But could it be that Toyota actually sees something special in Tesla and wants to help guide the company into the future? Check out this quote from Toyota CEO Akio Toyoda:

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.

Seems like Akio sees a little bit of Toyota’s startup days in Tesla, no? In addition, Toyota said it does plan to work with Tesla to develop electric cars and parts. The companies will also collaborate on production systems and engineering support for electric vehicles.

Talk about a huge score for Mr. Musk and his little car company!

“It is an honor and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla,” Musk said.

From Toyota’s perspective, $50 million is a drop in the bucket. For Tesla, it could be the difference between producing the Model S or not. If the partnership works, it’ll pay back exponentially for Toyota. If it doesn’t work, Toyota will never miss the coin. Seems like a pretty good bet.

And with Toyota’s experience backing Tesla’s research and engineering, it would be foolish to bet against this partnership. Watch out world, Tesla is about to explode.

Can Tesla fail now that is has Toyota’s backing?


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