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Toyota And Tesla Partner On Electric Car Venture In California

Toyota is buying a $50 million stake in electric-car maker Tesla Motors, and Tesla is buying a closed Toyota joint-venture factory in Fremont, Calif., to build its Model S and other vehicles, Alan Ohnsman reports. The plant, known as the New United Motor Manufacturing Inc. or NUMMI, was for 25 years a joint venture between Toyota and the former General Motors.

"This seems like a good deal for both parties, especially Toyota, from being able to avoid the political fallout from shutting NUMMI down to being able to offer a new electric vehicle with just a low initial investment cost," says Edmunds.com CEO Jeremy Anwyl.

Toyota is the world's biggest seller of hybrid autos, and Tesla is the only company selling U.S. highway-legal, battery-powered cars. President Barack Obama has set a goal of getting 1 million plug-in hybrids and electric cars on U.S. roads by 2015.

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