In a surprise move, Toyota Motor Corp. has announced a partnership deal with "innovative" electric sportscar-maker Tesla Motors. Toyota, which plans to invest $50 million in the small Silicon Valley car company, will reopen the recently shuttered NUMMI auto plant in Fremont, California, to manufacture the Tesla Model S electric sedan and further expand its already-successful line of hybrid vehicles. While some have derided the move as merely a "political" attempt by Toyota to revamp its battered image, others believe the collaboration could give an much-needed boost to the struggling electric vehicle (EV) market. Can Toyota-Tesla pioneer a future of petroleum-free cars? (Watch a Bloomberg report about Toyota's stake in Tesla)
This isn't just a PR move: "If Toyota decides to jump into the EV market," says Chuck Squatriglia in Wired, "it has the skills to do so." Toyota already "dominates" the hybrid market, and "knows electrification" through its development of the plug-in Prius and a slew of concept vehicles. Armed with Tesla's know-how and "proven EV tech," Toyota could soon command the all-electric market as well.
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Toyota's playing catch-up: Actually, Toyota "has some catching up to do when it comes to fully electric cars," says Joann Muller in Forbes. While "both Nissan and General Motors plan to introduce plug-in EV in the U.S. before the end of this year," Toyota was intending to offer only "a short-range, electric commuter car and a plug-in Prius hybrid in the U.S." by 2012. Toyota's really going to have to capitalize on Tesla's technology to gain the upper hand.
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We'll see soon enough: The viability of electric cars is still in question, says Jim Jelter in Market Watch. And the Toyota-Tesla venture is already facing "all sorts of problematic manufacturing and labor issues." But "despite the pitfalls and the distinct possibility of failure, it's refreshing to see that a little of the old gold-rush mentality has survived these glum economic times." Now, let's see if they can capitalize.
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