That's the plan on paper.
In reality, we're a long ways from seeing that happen.
As one auto industry veteran told me after hearing about the partnership, "These relationships rarely generate huge returns. Sounds good to say they are hooking up, but actually making it work is far different."
In other words, let's see if Tesla and Toyota are true partners developing electric cars.
Of the two companies, this helps out Tesla more than it helps Toyota.
It's buying into an established auto plant (NUMMI in northern California) where it can build its new model, the electric powered S sedan. The infrastructure is already there. Plus, Tesla should tap Toyota's manufacturing expertise so it avoids potential pitfalls that go with ramping up mass-market production.
What does Toyota get?
A $50 million stake in Tesla could pay off when Tesla becomes publicly traded, though at this point it's hard to say how valuable that will be. And it aligns itself with a player in the electric car business. The industry is still in its infancy, and Tesla has made great strides already. Work it can build upon in the future, and which Toyota should tap into.
All of this makes sense, but let's keep the partnership in perspective. In the auto business, this tie up of tie up is often announced with great fanfare, only to fizzle over time. Remember the partnership between Tesla and Daimler?
Let's see if the Toyota/Tesla relationship is different.
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