Closed NUMMI Plant in Fremont Gets A New Lease on Life With Tesla – Toyota Deal

Friday May 21st, 2010 at 9:55 AM
Posted by: Derek

tesla_model_s_sedan_medTesla and Toyota to build electric cars at NUMMI plant

The closure of the NUMMI plant in Fremont, California six weeks ago was just another downfall to California’s struggling economy and double digit unemployment rate. Late Thursday, Tesla Motors announced that it is teaming up with Toyota to build its all-electric Model S sedan at the recently shuttered NUMMI plant in Fremont, creating more than 1,000 new jobs.

Under the agreement, Toyota, the world’s largest automaker, will invest $50 million in Tesla, which will buy the NUMMI plant for an undisclosed sum. The joint venture was unveiled by Akio Toyoda, Toyota’s CEO, who flew in from Japan for the announcement, Tesla CEO Elon Musk and Gov. Arnold Schwarzenegger at a heavily attended 5 p.m. news conference at Tesla’s Palo Alto headquarters.


City Council members from Fremont, where NUMMI is located, were thrilled and raced across the bay to attend the news conference.

Unfortunately, there were some losers in the new deal. Among those who felt like the mistress that was kicked away for a newer and younger model were officials in the city of Downey in Los Angeles County. For months, they had been working with Tesla in hopes that the automaker would locate its factory there. The Downey City Council was hours away from voting on the terms of a lease for Tesla. Tesla executives finally told Downey city officials that they were going to Fremont instead on Thursday afternoon, catching staffers who have spent hundreds of hours on the nearly final deal completely by surprise.

“We’re shocked, appalled and disgusted,” said Downey Councilman Mario Guerra. “We have been dealing in good faith with Tesla and feel stabbed in the back.”

Tesla will use the NUMMI plant to begin production of the Model S, a sedan that can seat five adults and two children and has a range of 300 miles. Once it reaches full production at the NUMMI plant, Tesla expects to produce 20,000 electric vehicles each year, which will sell for $50,000.

But the Model S would occupy only a small part of the NUMMI plant, leaving room for Tesla and Toyota to manufacture other models of electric cars there.

“Long term, we think we could create 10,000 jobs, half from Tesla and half from our suppliers,” Musk said.

“We love our cars here in California,” said Schwarzenegger, who used the news conference to talk about how California’s strict environmental policies are driving innovation. “But we also love our environment, our coastline, our ocean, our sky. … I don’t have to tell you how much this means to California, where we have 12.5 percent unemployment.”

Official press announcement from Toyota after the jump.

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