Engineering-wise Toyota does not gain much from this investment. Toyota is way ahead in EV and HV technologies. Take the drive motor for example. Tesla uses air-cooled AC induction type (possibly off-the-shelf), whereas Toyota’s motor is of permanent magnet synchronous type with reluctance poles, and is water-cooled. Induction motors cannot be turned into a generator for energy recovery, whereas the permanent magnet motors can generate electricity when braking or coasting. By just replacing the Roadster’s motor (288HP, peak) with Toyota’s 224HP motor (for LS600h) and its variable-voltage, variable-frequency PWM inverter instantly you have a high-tech EV. The Roadster’s battery pack is packed with more than 6000 off-the-shelf Panasonic cylindrical batteries and is very bulky and heavy (and expensive). Toyota should be able to help Tesla in this area also since Toyota and Panasonic (which now owns Sanyo) have long working together to develop Li-ion batteries specifically for automotive use.
What Toyota has bought is the goodwill of Americans (especially politicians) since Tesla is now able to assemble its products at the old NUMMI plant in Fremont, CA, which GM abandoned last year as it walked away from the GM-Toyota joint venture.
Tesla also needs new chassis (or platform) of its products since Lotus can no longer provide it. At any rate its quasi-handmade nature is liability for future mass production and cost reduction. Toyota will certainly be able to provide answer to this requirement.
That's pretty much the bulk of it. In no way did Toyota commit to build ANY cars with Tesla. All the agreed to do was buy $50 million worth of Tesla stock IF it happens by the Dec. 31st deadline.
Here's a good article that pretty much sums up the political BS involved with this.
All Charged Up! (on Politics) The Obama administration's plan to raise California's Nummi auto plant from the dead, at least until the November midterm elections.
'Nummi is saved," proclaimed local headlines, referring to what had been the Golden State's sole auto plant until it closed on April 1.
"We will create electric vehicles together," declared CEO Elon Musk of fledgling Tesla Motors, citing a May 20th deal with Toyota to revive the shuttered factory in Fremont, Calif.
The arrangement is "a symbol of promise, an example of what's possible here in America," stated President Obama.
In the short two weeks since they were uttered, these statements have each acquired a big asterisk, with Mr. Obama's perhaps destined for the Hall of Fame of unintended ironies. When a government is deeply in debt, it needs businesses that generate tax revenues rather than consume them.
Here's the back story: Nummi was a joint venture between GM and Toyota in the 1980s to buy Toyota some protection from anti-import fury in Congress and shovel backdoor subsidies to GM. The plant never made money, and when bankruptcy afforded the excuse, GM walked away. Toyota, itself laboring under overcapacity, declined last year to keep the plant open to please the UAW and local politicians. That decision, however, preceded the firestorm over alleged runaway Toyotas.
Tesla is the dreamchild of Silicon Valley entrepreneur Elon Musk, but not even Mr. Musk's ample bank account is capable of providing financing on the scale required to bring a car to market. Especially not when it's already being drained to finance his unprofitable space-rocket company and now a divorce. In February, Mr. Musk told a judge he's "out of cash" and living off loans from "friends."
Among the friends he didn't enumerate is the federal government, which under a law Mr. Obama keeps bragging about has become Tesla's biggest supplier of working capital, in the form of $465 million in federal loan guarantees. But there's a wrinkle: This money can't be used directly to put Tesla's new "Model S" into production, but will be available only after Tesla raises the necessary funds from private investors.
Bottom line: Tesla needs an IPO, even in today's inhospitable market and despite its unpromising business plan. Mr. Musk himself especially needs an IPO to refloat his lifestyle by converting some of his Tesla stake to cash.
Enter California Treasurer Bill Lockyer, who reportedly put together the Toyota deal. Though Toyota CEO Akio Toyoda apparently jumped at a chance to regain some political brownie points in Toyota's most important U.S. market, he was not lacking in shrewdness. Mr. Musk will have to buy the plant by October for $42 million even if it means tapping Tesla's fast-dwindling cash. In return, Toyota will invest $50 million in Tesla stock when and if Tesla succeeds in floating its IPO by a Dec. 31 deadline.
Oh, and Tesla's hastily revised disclosures also indicate Toyota and Tesla didn't agree to "create electric vehicles together," but agreed merely to talk about doing so, maybe.
What we have here is a political kludge of the murkiest order. Tesla reportedly was within hours of closing a deal for a plant site in Downey, Calif., when the Toyota offer materialized, thanks in part to undisclosed state incentives orchestrated by Mr. Lockyer. ("Downey is awesome," Mr. Musk wrote to city fathers apologizing for the last-minute jilting.)
Hardly was the deal announced before White House aide Jared Bernstein was on a conference call urging Tesla to rehire laid-off UAW workers. And already scheduled was Mr. Obama's campaign, er, presidential visit to Northern California, in which he was pleased to take credit for the deal.
Within days too, a bipartisan cabal of legislators introduced identical bills in the House and Senate to ladle out fresh subsidies for electric cars, including $5 billion to reward "deployment communities" or "corridors" (in California, say) that sponsor local schemes to spur sales of electric cars.
Whether these signs of official favor will be enough to float Tesla's IPO is highly questionable (though don't be surprised if Goldman Sachs volunteers to underwrite the offering) but a bet on Tesla clearly has become an undiluted bet on government subsidies.
Mr. Musk's enthusiasm is admirable, but note that the powerful elixir of political favoritism and tax handouts has by now lured into the market for electric cars companies with actual experience building and marketing cars. Nissan is drawing down $1.4 billion in Obama loan guarantees to refit a plant in Tennessee. And who doubts that the forthcoming Chevy Volt will be touted as proof of the "success" of Washington's bailout of GM, price tag $65 billion?
These companies have thousands of workers, lobbyist armies and political clout. Tesla investors would be kidding themselves to imagine Mr. Musk's political allies-of-the-moment represent some kind of commitment to the company's long-term success. They're playing for an applause line, a headline, a campaign ad in the here and now, mostly related to the neuralgic Nummi issue.
Still, an IPO to keep Tesla's Hail Mary in the air past the midterm elections might suit a lot of people. Not the least of them is Mrs. Musk, who claims she's due 10% of the company in a divorce settlement.
http://online.wsj.com/article/SB10001424052748703325104575280380064974048.html?mod=rss_Today%27s_Most_Popular
