The Toyota-Tesla Partnership: Why It Could Be A Big Deal

The recently announced partnership between electric car darling Tesla Motors and Japanese automaker heavyweight Toyota, despite not being quite the done deal many initially thought, still sent shivers down the necks of many in the auto industry. The unusual arraignment between the two companies, which includes joint development of electric cars and conversion of a shuttered California auto plant to a facility to build these new electric cars, was seen by many as a watershed moment in electric cars becoming more mainstream (perhaps only matched by the excellent presales of the Nissan Leaf). To get some perspective on this deal, we bent the email ear of John Voelcker, senior editor of GreenCarReports.com, for his take on what makes this deal a big deal:

tesla vehicle

Image via Tesla Motors

EarthTechling: What is so significant about the Tesla-Toyota deal announced recently?

John Voelcker: Toyota has never before invested in an existing auto brand outside Asia and it also historically has developed pretty much everything internally. The company is heavily wedded to hybrid-electric technology whereas Tesla is pure EV and, finally, it’s not clear that Tesla’s lithium-ion battery pack technology is superior to Toyota’s.

ET: Why do you think Tesla chose to team up with Toyota and not go it alone on this venture?

Voelcker: Tesla wants, above all else, to survive! Toyota can offer several things it desperately needs, including: money (Toyota is buying $50 million of Tesla stock just before the IPO); a nearby factory for the Model S (which is NUMMI in Fremont, CA); access to world-class volume auto-production engineers; and access to globally conpetitive platforms, components, and supply chains. Tesla’s end game is surely to be bought, just like any other venture-funded startup. Their schedule for Model S production is very, very aggressive, and most analysts doubt they will be able to start production by the end of 2011–but Toyota could help.

I am the editor-in-chief and founder for EarthTechling. This site is my desire to bring the world of green technology to consumers in a timely and informative matter. Prior to this my previous ventures have included a strong freelance writing career and time spent at Silicon Valley start ups.