Toyota teams up with Tesla to develop electric vehicles

Both companies will come together to form a team that will design parts and production systems for future electric vehicles. As part of the deal, Toyota will purchase US$50 million worth of Tesla's stocks as soon as the company gets publicly listed. Tesla in return will purchase Toyota's NUMMI factory in Fremont, California.

According to Toyota's President, Akio Toyoda, "I've felt an infinite possibility about Tesla's technology and its dedication to monozukuri (Toyota's approach to manufacturing). Through this partnership, by working together with a venture business such as Tesla, Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has."

Tesla's CEO Elon Musk added, "Toyota is a company founded on innovation, quality, and commitment to sustainable mobility. It is an honour and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla."

Tesla will take over the NUMMI plant that Toyota previously used to build Corollas and Tacomas before it was shut down in April. Tesla will use the factory to build the Model S, and Musk said, "The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system." Musk added that the factory "will give us plenty of room to grow."