May 20, 2010, Palo Alto, CA -- Tesla and Toyota have announced that they will cooperate on developing electric vehicles and parts, including collaborating on developing production systems and engineering.

Both companies will create a team of specialists to manage the new partnership. Additionally, Toyota will buy $50 million of Tesla’s common stock issued, according to the company’s press release, “in a private placement to close immediately subsequent to the closing of Tesla’s currently planned initial public offering.”

Toyota says its goal is to build more affordable electric cars for mainstream buyers and drive down the cost of electric vehicles overall.

Toyota President Akio Toyoda also said he respects Tesla’s engineering prowess and business spirit.

“I sensed the great potential of Tesla’s technology and was impressed by its dedication to monozukuri (Toyota’s approach to manufacturing),” said TMC President Akio Toyoda. “Through this partnership, by working together with a venture business such as Tesla, Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has. Decades ago, Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that ‘venture business spirit,’ and take on the challenges of the future.”

Tesla CEO and cofounder Elon Musk said that Toyota is a company founded on innovation, quality, and commitment to sustainable mobility.

“It is an honor and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla,” said Musk. “We look forward to learning and benefiting from Toyota’s legendary engineering, manufacturing and production expertise.”

Related to this announcement, Tesla has announced that it has purchased the former NUMMI plant in Freemont, California to build the Model S electric sedan and other electric cars in the future. The plant in northern California is near Tesla’s HQ in Palo Alto.  The NUMMI plant was formally a joint GM-Toyota manufacturing facility.

"The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system," said Musk. "The new Tesla Factory will give us plenty of room to grow."