Toyota and Tesla to Build RAV4 EV at Toyota’s Woodstock, Ontario Production Facility, Not California

Canadian taxpayers are subsidizing the production of the Toyota electric vehicle.

Toyota and Tesla Motors, Inc. (Tesla) said today that their jointly-developed RAV4 EV will be built at Toyota Motor Manufacturing Canada (TMMC) in Woodstock, Ontario beginning in 2012.

It was a blow to former NUMMI associates in Fremont, California whose UAW plant was shut down by Toyota last year. It was hoped that production of the fully electric version of the RAV4 would go into the plant when Tesla bought it in 2010. At the time some industry insiders thought that the joint program with Toyota on the EV was nothing more than an image cleaning effort by Toyota after it shut its only unionized plant in the U.S. Toyota owns a small stake in Tesla, and Tesla has previously said that a Model S electric sedan will go into production at Fremont sometime during 2012. Tesla’s latest financial results showed a $59 million loss for Q2 – in a losing streak that goes back to Tesla’s founding in 2003. Tesla went public in 2010.

Toyota will pay Tesla about $100 million to supply the electric powertrain, which includes the battery, motor, gearbox and power electronics for the RAV4 EV. Tesla will build the electric powertrains at its production facility in Palo Alto, California and then ship them to TMMC for final assembly into the vehicle.

Both the Canadian Federal and Ontario provincial governments are contributing about $140 million to Toyota for refurbishing its plants in Cambridge and Woodstock under the name Project Green Light. Toyota will use some of the government money to build the RAV4 EV along with the gasoline powered version.

Tesla needs more income. The RAV4 EV will help but won’t alone make Tesla profitable.

“The Tesla-Toyota joint development team has agreed that building the vehicle at the Woodstock plant on the same line as the gasoline-powered RAV4, will streamline and simplify the production process and guarantee the highest level of quality control,” said Ray Tanguay, TMMC Chairman, who hosted Canadian officials at the plant today and thanked them for their support.

The RAV4 EV will be sold at U.S. Toyota dealers through Toyota Motor Sales, U.S.A., Inc. (TMS). Details including pricing, volume and regional distribution will be determined and announced at a later time, Toyota said in a statement.

In July of last year, Tesla and Toyota Engineering and Manufacturing, America (TEMA) collaborated to convert 32 conventional gas-engine RAV4 compact SUVs into fully functional RAV4 EV prototypes.

The RAV4 EV is one of several advanced-technology coming for Toyota. (Toyota previously sold an electric version of the RAV4 from 1997-2003 with limited success.) In addition to expanding the Prius family with the upcoming Prius V and Prius Plug-in Hybrid, Toyota will introduce an electric version of the Scion IQ in 2012 and a Hydrogen Fuel Cell Hybrid Vehicle by 2015.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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