Toyota Buys 2.5% Stake In Tesla for $50 Million

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The Tesla Model S has taken a big step forward toward production today, thanks to a $50 million investment by Toyota Motor Company.  Toyota’s investment will yield a 2.5% stake in Tesla Motors, while Tesla will receive a closed Toyota GM plant outside of San Francisco to build its Model S electric car.

Tesla initially received a $465 million federal loan toward the Model S production facility, but this investment by Toyota that includes the manufacturing plant will cement Tesla’s plans for the Model S.  Toyota, on the other hand, earns a 2.5% stake in Tesla and a healthy dose of damage control for its recent recall woes.  While Toyota was once the king of the electric hybrid with its Prius sedan, the growth of independent companies like Tesla and the big market introductions of the Nissan Leaf have threatened Toyota’s market share.  Upon this partnership, Tesla will receive the production and distribution know-how of Toyota and Toyota will earn greater control of the electric car market of the future.

Tesla will begin production of the Tesla Model S electric car in 2012 at the New United Motor Manufacturing Inc.  Tesla plans to produce 20,000 Model S vehicles per year.