Toyota of the Future May Say `Tesla Inside’

December 4, 2010/Steve Tackett

MOTOR MATTERS FREEWHEELING BY BILL VISNIC

It’s hard to say who got the better of the “branding” deal when many computer makers started adding the little sticker “Intel Inside” to boast the computer was powered by an Intel processor.
Either way, it was a stroke of marketing genius and remains a memorable exercise in awareness-branding of a technology component; the computer processor — that otherwise isn’t too exciting and consumers barely understand.
The world’s largest automaker, Toyota, took a page from that textbook when it introduced a battery-powered version of its coming RAV4 crossover at the recent Los Angeles auto show. The boss of the company’s U.S. sales arm proclaimed, “It is my pleasure to introduce the second-generation RAV4 EV, powered by Tesla.”
You don’t really have to be one of the growing Electric Vehicle fan base to recognize the name Tesla — the California high-tech startup that gained fame when it started selling its Tesla Roadster, a high-performance battery-powered sportscar for rich guys — but those who follow the auto or high-tech industries also know Tesla’s perhaps more-notable development has been its proprietary lithium-ion batteries.
Tesla uses the batteries in its own car, of course, but also supplies them to others, including Germany’s Daimler (maker of Mercedes-Benz) and now, Toyota.
The unveiling of the Toyota RAV4 “powered by Tesla” actually is the culmination of a whirlwind couple of months in two companies’ expanding relationship, one that’s seen Toyota sell Tesla its enormous former auto assembly plant in Fremont, Calif., then quickly announce it was investing $50 million in the tiny company that’s so far produced fewer cars in its entire history than some Toyota plants make in a day.
The partnership with Tesla is about far more than the RAV4 EV (coming to showrooms in 2012) and advanced batteries. Toyota, stung by a rash of quality and safety recalls, as well as harsh criticism (and even Congressional scrutiny) following the unintended-acceleration situation earlier this year, is hoping its association with Tesla will help dissipate the notion that many of the company’s recent hassles have been the result of a corporate culture that is too conservative, too overconfident and too slow to adopt new ideas.
In short, Toyota’s hoping it can learn something from the methods of a fast-moving, entrepreneurial venture-capital company like Tesla. Meanwhile, the relationship opens all manner of possibilities for Tesla, too.
The California manufacturing plant it bought from Toyota — which, incidentally, Toyota used to share with the former General Motors — has much more capacity that Tesla itself will need anytime in the foreseeable future, even when Tesla begins making its second car, a sedan called the Model S that reputedly can travel as far as 300 miles on a single charge of its lithium-ion battery pack.
Could Toyota plan to sell its own version of Tesla’s Model S, immediately moving to the front of the line in the fast-moving world of electric-car development? And although Toyota’s not confirming it yet, it’s widely believed Toyota and Tesla will build the production version of the RAV4 EV in the Fremont plant.
From there, who knows? But for now, the team of Toyota and Tesla has the potential for an electrifying payoff. — Bill Visnic, Motor Matters

Copyright, Motor Matters, 2010

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