What can a room in Palo Alto, California with  governor and superstar Arnold Schwarzenegger, Tesla CEO Elon Musk and Toyota CEO Akio Toyodabe all about? A fantastic partnership between the two companies, Toyota and Tesla, on electric vehicle development  that will take place in California. For starters Tesla will take over the recently closed NUMMI factory in Fremont, CA and will start producing the Model S sedan.

California governor Arnold Schwarzenegger in a Tesla

Toyota will invest $50 million for a private placement of Tesla common stock and the state of California will provide a sales tax abatement to Tesla for capital equipment expenditures to tool up the plant. This state abatement will sum up to around $20 million over the next couple of years of activity, if laws remain mainly unchanged regarding taxes in the auto field.

According to Musk, production of the Model S will bring about 1,000 employees back to the NUMMI plant to produce about 20,000 cars a year at first. But this is only the beginning, future development of the plant, quantity wise and regarding more models, may open around 10,000 jobs for California workers! Gov. Arnold is keeping his word of doing whatever possible for the financial rehabilitation of California. Musk revealed that some employees have already been rehired, but was non-committal on the subject of union representation.

Tesla Model S prototype, first model to benefit fro Toyota+Tesla California deal

This partnership means more however, Tesla will benefit from Toyota know-how and supply lines, while Toyota opens up to new markets and has a stable supplies demand. Add on top of that the publicity benefits for both parties – Toyota first of all, and you got yourself on heal of a deal. Not to mention that all of this is for the future of electric cars.

As always, things have a downside. The The deal for the NUMMI plant leaves Downey, CA in the air, and the mayor of the aforementioned place stated he feels “stabbed in the back by Tesla”. The Toyota deal apparently came together very quickly and Musk acknowledged that he would still like to work with Downey, perhaps for a future Space-X facility.

The Tesla-Toyota deal for EV in California brought no changes, up to now at least, on the release date for the Model S. The actual production only starts as of 2012, but prototypes will be revealed as changes and updates will be, progressively, applied. In former days of glory, the plant in Fremont CA was able to assemble more than 300,00 cars a year, but no official statement on how many Model S plus other possible models will be built.

[ PHOTO GALLERY: Tesla Model S prototype ] :

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