The Toyota Tesla NUMMI deal will become a giant financial sinkhole. Tesla has overengineered late to market products in its DNA.
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There are some things wrong with this deal. Elon Musk’s divorce may end up causing Tesla to lose their $450+ million government funding. His wife wants 10% of Tesla shares and if that causes Elon’s % ownership to sink below a certain %, then Tesla would be considered in default and they will not get the government’s $450 million stimulus money. That is still up in the air.
There have only been 5000 EV vehicles sold thus far and Tesla expects to produce 20,000 at first. The factory can produce 400,000 plus cars. Does Tesla have a viable mass market product? Will Tesla have access to Toyota’s dealership network?
Toyota’s investment of $50 million is chump change. That is not exactly a ringing endorsement of Tesla. Toyota is using this as an opportunity to improve their recently tarnished public image.