We’re here at Tesla’s new headquarters in Palo Alto, Calif. live-blogging the announcement of a strategic partnership between Tesla Motors and Toyota. Tesla Motors CEO Elon Musk, Toyota President and CEO Akio Toyoda and California Governor Arnold Schwarzenegger are on stage.

Elon Musk: This is one of the most exciting days in Tesla history as we are announcing this historic partnership. This consists of three major areas: Toyota is making a major investment in Tesla, we will be purchasing the NUMMI plant and making the Model S and other cars there, and finally we will create some electric vehicles together. It’s a great honor for Tesla to be working with Toyota, a company I have long admired. It’s a great honor.

Akio Toyoda, CEO of Toyota: We agreed to the following terms. We will invest in Tesla. I have been told Tesla has agreed to purchase part of the land owned by NUMMI. It will produce electric vehicles there. I myself spent time at NUMMI and learned much about working in America there, so I feel a sense of attachment. I am extremely happy that the DNA of carmaking that NUMMI developed over 25 years will live on in the industry of the future. I would like to thank Mr. Musk and all the people at Tesla, the governor, and the state of California that made the agreement possible.

During my visit here this spring Mr. Musk gave me the opportunity to drive one of Tesla’s vehicles. Not only was I impressed by the technology. I felt the wind, the wind of the future. Toyota was also born as a venture business and grew over the year. [We] hope to recall that venture business spirit. Since taking office last June, I have raised the topic of carmarking for the next 100 years and the need to depend less on oil. Toyota is enhancing its environmental technology and [will] further participate in new and emerging industries such as electric vehicles and Smart Grid. [We] hope to continue to be a good global citizen in the U.S.

Governor Arnold Schwarzenegger: Great to have you hear, Akio. We love his cars that he’s producing. We love our cars here in California, but we also love equally the environment, and we love to protect our coastline, our ocean and our sky. The environment is very important, which is why we passed legislation like AB 32 to roll back greenhouse gases and the new standard for renewable energy and the green building initiative. When we passed those laws we felt a certain resistance, but now more companies are coming on board — particularly auto manufacturers. California has been sued by every car manufacturer you can think of — not Tesla of course. But we didn’t pull back, we stayed on course. All of these new companies invest in California because we stay the course.

Toyota is a very admirable company. Let’s not forget the Prius — a car that goes more than 50 miles a gallon, truly revolutionary. Here we have Tesla, proving you can do something very sexy looking that goes from 0 to 60 in less than 3.9 seconds and is attractive and cost effective. Two companies building great cars coming together here. It’s going to be great for California — Toyota is investing $50 million in this great company they are both expressing confidence in each other. This new partnership will create 1,000 new jobs. I can’t tell you how much this means to California with our 12.5 percent unemployment rate.

Because the NUMMI plant was closed last month, thousands of workers were laid off, and now we can bring them back because of this partnership. They could have gone anywhere else in America, but they stayed here because of the tax incentives, and financially it worked out. I want to recognize Treasurer Lockyer for sitting down with us and recognizing that there is money there that the Treasurer has that most people don’t know about. He looked and he found things. This is someone going beyond their regular duties. I appreciate the regulators who really work on the tax incentives. There are some politicians still calling these “tax loopholes” — but they are incentives that are putting people to work, and they are working.

I also want to mention that there are people still fighting environmental regulations — greedy oil companies from Texas who don’t like what we’re doing. There is less oil that they are selling. If everyone drives the great cars these people are creating, there will be no more oil. That’s why they are spending so much money in Texas to roll back our new laws and standards. When we have two-thirds of the cars on the roads electric cars, we won’t need the oil. We will have more choices.

Thank you so much for all the work you have done. Thank you to the press for creating all this excitement and making it possible to produce cars in California and employ so many people. Thank you.


VentureBeat: How did Daimler, your other major auto manufacturer investor react to this news? Did they need to approve of the deal?

Musk: Daimler was informed of the agreement last night, and they have been overwhelmingly positive. We did not need to get their approval. They have actually been encouraging deals with other major manufacturers. It mitigates their risk, it’s good to have another major brand’s endorsement, and it won’t interfere with their relationship with Tesla.

Q: What will need to be spent to get NUMMI up and running?

Musk: It’s a sales tax abatement on capital equipment purchases. It depends on how much we spend on capital equipment, amounts to a $20 million incentive if we spend a few hundred million dollars on capital equipment. It’s an incentive that would be good for the state of California. If you estimate what are the taxes payed by employees and other sources. We can’t publicly disclose Tesla’s financial investment in NUMMI.

Q: A Downey, Calif. representative says he feel stabbed in the back. What happened there?

Musk: It’s not like they had no idea. We explicitly mentioned NUMMI, but we weren’t sure a deal could be put together or that Tesla could afford NUMMI. These were question marks only resolved yesterday. There was no attempt at all to mislead Downey. In the future when Space X or another venture is looking for expansion space, that will be one of the first places we look. This is also part of the relationship with Toyota, which was a big factor.

Q: Tell us more about the future vehicles Toyota and Tesla will be working on.

Musk: The discussions are still in the early stage about the kind of vehicle we would make. The Model S would only occupy a small portion of the NUMMI plant; the Model S is only a 20,000 vehicle production. In the long term, we plan to use the full capacity of NUMMI. Initially, we’re talking on the order of 1,000 jobs, probably closer to 10,000 jobs, half from Tesla and half from suppliers. Pretty significant.

Q: How soon will people be hired? Will it be a union shop?

Musk: We’ve already hired a lot of NUMMI people and plan to hire a lot more in the future. We’re going to ramp it up even more. As far as the union is concerned, we’re neutral on that. We won’t fight any union activity, but [we're] not explicitly cultivating it.

Q: Can you give us a timetable?

Musk: Model S will be in 2012, but there will be more advanced prototypes unveiled to the public in the intervening period. You can expect a lot of things in parallel, it’s not going to be a one trick pony. The Model S won’t be a one trick pony. There will also be the joint projects with Toyota that will come out sooner than that. Would really like to compliment Mr. Toyoda on his amazingly fast speed of action. Toyota works just as fast as Tesla, very impressive.

Q: How did the deal evolve? Who approached who?

Musk: The first I heard, I received a call that Mr. Toyoda was interested in meeting with me the next time he was in California, and I said that sounded great. I invited him to my house and really hit it off and [we] shared a lot of principles in common, went for a drive in the roadster, saw a lot of things in common. Things went from there — how can we figure out how to do something together? How can we make this a serious partnership? There’s NUMMI, some investment. It seemed like a great way to kick off a meaningful strategic partnership.

Q: What’s next to gear up toward that 2012 date? What happens now?

Musk: Since we’re in prep for a public offering I have to be cautious about forward-looking statements, but we’re pretty constrained. We will be hiring 50 people a month, and that will be increasing in coming months. There will be a particular ramp up next year. I wouldn’t be surprised if we were in the region of 2,000 employees within the next few years, about half of that at NUMMI. We have a group here [Palo Alto] which is about 500 people already.

Q: As I understood it, NUMMI was owned by General Motors and Toyota, so who are you purchasing this from?

Musk: We’re purchasing the NUMMI factory. There’s three parcels, and parcel 2 is where the factory is, and that’s what we’ve purchased. We purchased it from the entity that is NUMMI, which is 50-50 Toyota and General Motors.

This story, written by Camille Ricketts, was originally posted on VentureBeat's GreenBeat, an editorial partner of GreenCarReports.