New Deal to Help Tesla Reach its $49,900 Model S Target Price
Canadian Auto Press
As far as green projects go, it hardly gets bigger than this. Toyota and Tesla will join forces for electric vehicle development and production, with Tesla taking over the recently shuttered NUMMI assembly plant in Fremont, California, previous home to Pontiac’s Vibe five-door.
Tesla and Toyota Partner for Model S Production at NUMMI Plant
A joint press conference was held Thursday, May 20th, with Tesla chief executive Elon Musk, Toyota CEO Akio Toyoda, and California governor Arnold Schwarzenegger addressing media and VIPs.
The relationship is more than a strategic sharing of technology and production capability, but rather a full partnership that will see $50 million from Toyota into Tesla common stock, while the state of California promises a sales tax abatement to Tesla for capital equipment expenditures needed for modifying the plant. The abatement is expected to amount to approximately $20 million over the next few years, says Musk.
Model S production will employ about 1,000 workers, says Musk, returning many of the same NUMMI personnel to their jobs. The assembly facility has the capability of producing up to 300,000 vehicles per year, much more than the expected production figure of 20,000 units for year-one, with the ability to employ up to 10,000 workers. Some workers have already been rehired, said Musk, but did not comment on union involvement; NUMMI was the only unionized Toyota plant in North America.
The relationship with Toyota and NUMMI allows Tesla to sidetrack many of the supplier and production problems it initially experienced with its Roadster, being that some of Toyota’s suppliers and production processes can be carried forward for the Model S. This should help Tesla achieve the low cost requirements needed to meet its optimistic sale price of $49,900 per car.
The Model S production will start in 2012 as planned, with a promise of more advanced prototypes later this year.
It’s unclear whether additional Tesla models will expand plant usage, or whether Toyota will benefit from the new partnership by getting a car of its own.
