Green is Good: Tesla ties the knot with Toyota

I’ve read that one of the inspirations for Robert Downey’s characterization of his Iron Man role (the sequel now playing in a theatre near you) was high-tech wunderkind and Tesla founder Elon Musk. Some of the current Iron Man 2 was shot in Musk’s Space-X rocket labs (he’s a rocket scientist as well), and he also makes a brief cameo appearance.

Yet hearing that Musk has been able to cajole Toyota into buying $50 million worth of Tesla stock to “collaborate on the development and production of electric vehicles,” the keys to the Japanese automaker’s recently shuttered NUMMI California plant, and an additional $20 million from the bankrupt California state government to retrofit said plant for the production of Tesla’s forthcoming Model S luxury electric sedan and “possibly … include the production of more models”, maybe it’s the real life Musk, not the fictional Iron Man, that has all the super powers.

When Musk appeared in the front row of Mercedes-Benz’s Frankfurt show presser last September, snuggling up with 'Benz head Dr. Dieter Zetsche after the German automaker  had purchased a 10 per cent share of Tesla, the scuttle-butt suggested ‘Benz was going to be low-volume Tesla’s sugerdaddy: The big car company that would help Musk transform his quaint, low-volume company into a bigger player, or simply just buy Tesla outright for its EV know how.

We may never know why that relationship was never fully consummated. But Tesla’s new tie-up with the Japanese automaker seems like a one-sided victory for Musk.

First, Tesla's hand-made Roadster EV is a dead end. There are only so many rich geeks who need to one up their Ferrari-buying chums in the world. And slapping a bunch of cell-phone batteries into a Lotus Elise was never Musk’s long term dream.

No. Musk’s dream is to go mainstream. And he’s smart enough to know that his current cottage industry setup (that hand build’s the current Roadster) was not going to have the resources or know how to build a whole new car from scratch, as the Model S sedan will be. The bigger question here is why mammoth Toyota is jumping into bed with miniscule Tesla.

For all the tens of millions Toyota is spending on purchase incentives to keeps its new car sales from collapsing during its current recall crisis, $50 M is peanuts for what may be a potentially great bit of PR for Toyota.

Closing the NUMMI plant and sending home its workers was just a another bit of bad news it didn’t need.

The other reason may be Toyota’s struggling luxury hybrid strategy. A Model S sedan (with an anticipated price of  $49,900, including a U.S. federal tax credit) maybe an easier sell with a Tesla badge on it than as a Toyota or Lexus.

I’m not sure what Toyota’s escape plan is if this relationship goes sideways.

But at the very least, Musk will have Toyota’s money and a burgeoning acting career to fall back on.