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Tesla Motors + Toyota: Electric Car Joint Venture or Fusion Plan?

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Arnold Schwarzenegger had first leaked this news while in a visit to Google’s HQ in Mountain View, and stirred powerful reactions in the media and in Downey City, to whom Tesla Motors promised that they will build a car factory there.

“We are shocked, upset and betrayed. We can see why the public is so upset with corporate America,” said Downey City Councilman Mario Guerra, adding that Tesla had told the city it would sign the lease for the Downey plant on Friday.

Tesla chose the partnership with Toyota probably because they wanted to get stuck to the huge venture possibilities they could have with the giant. The second reason was probably because Toyota offered a more flexible deal, by locating the factory not in Downey City, but closer to the current Tesla HQ of San Carlos, CA.

Schwarzenegger made the news official at 5:00 pm yesterday, when, along with Akio Toyoda, co-founder of Toyota and Elon Musk, Tesla CEO announced the partnership. And he also gave the third reason why and how this had been helped to happen: “We love our cars in California and California loves cars! But we also love our environment and the coastline. This all happened because we created tax incentives for this company and this partnership,” Schwarzenegger said.

On the other hand, Toyota bought a $50 million stake in Tesla, along with closing the fore-mentioned deal with them. They will open their factory in the place of a closed one that should have been a joint venture  between GM and Toyota, across the San Francisco Bay in Fremont. New United Motor Manufacturing Inc. (NUMM) is the name of the facility that Tesla will buy from Toyota.

For the moment, this kind of collaboration is profitable for both parties, as it will help Toyota get over their car safety recent issues, and Tesla to gain momentum in making their Model S sedan, which they intend to sell for $57,400. Also, this would increase Toyota’s market share in front of Renault Nissan, that is going to release their LEAF sooner than everybody.

Is this venture Toyota’s long-term plan to tinker with Tesla and see if the business model fits into theirs, and they acquire Tesla Motors completely? It makes so much sense to me…

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