In the past, securing Toyota Motor Corporation (NYSE: TM) as a partner and investor would have been a score for Tesla Motors. The reality is that it still probably is. The problem is that Toyota has a tarnished brand after endless waves and waves of recalled cars. Tonight came the announcement that the two companies intend to “cooperate on the development of electric vehicles, parts, and production system and engineering support.”
As part of the deal, both companies will form a team of specialists, and better yet it is noted that Toyota has agreed to purchase $50 million of Tesla’s common stock issued in a private placement to close immediately subsequent to the closing of Tesla’s currently planned initial public offering.
Outside of this, it looks like this is a very general agreement that is not long on detail. Maybe Tesla just wanted to secure another deal with a leading brand before it comes public. By the sound of it, the IPO is not being derailed at all by the Flash-Crash nor by the ongoing sell-off.
Hopefully Tesla is not getting Toyota to give it advice on accelerators.
JON C. OGG
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