Toyota partnership

[Buckminster]

Not much more than a rumour at this point.

 

[Buckminster]

Korean news site Chosun is reporting that Tesla and Toyota are finalizing an agreement to partner on a small SUV. Tesla would provide the electronics and software (including Autopilot/FSD?), and Toyota would provide the vehicle platform.

[단독] 테슬라·도요타, 반값 전기차 만드나… 제휴 임박

단독 테슬라·도요타, 반값 전기차 만드나 제휴 임박

www.chosun.com

'It is reported that Tesla and Toyota have reviewed the partnership since last year and are approaching the final stage.

According to an official from the Japanese automobile industry on the 28th, Tesla and Toyota are considering jointly developing a small electric SUV platform (the car's basic skeleton). The partnership review has been conducted since last year. Toyota provides the vehicle platform to Tesla, and instead, Tesla provides some of the electronic control platform and software technology onboard its vehicle to Toyota.

When the partnership with Toyota is established, Tesla will be able to launch a compact SUV electric vehicle at low cost using the Toyota platform. In addition, sales of Tesla in Japan, which are around 1,000 units per year, are likely to increase significantly.

Tesla and Toyota have previously partnered. The two companies agreed to jointly develop electric vehicles in 2010, and in 2012 marketed Toyota's RAV4 electric vehicle equipped with Tesla's battery system. However, due to various reasons such as sluggish sales, in 2017, Toyota sold all of Tesla's stake (holding up to 3.15%) and the partnership ended. However, the close relationship between Musk and Toyota CEO Akio Toyota was maintained, leaving room for a reunion between the two companies in the future.'

I don't really get what Toyota brings to the table other than the ability to manufacture it faster than Tesla could if they had to build another factory.

I'm not the only one reading into this and putting the dots together that Toyota is the auto maker that Elon mentioned on the Q4 earnings call as having discussions about licensing Autopilot/FSD right?????

Lower costs? Toyota pays Tesla for the software........of which most of the work has already been done, while Toyota get's the low margin manufacturing part. Seems like Toyota would be paying Tesla for it's software and electronics, so mostly straight profit. The electronics would most likely be the FSD hardware and the camera/sensor suite. Seems like a win-win for Tesla

Toyota is the customer, they bring money to the table.

For reference, just 10% of Toyota's annual production is close to 1 million vehicles. If all of those Tesla+Toyota vehicles are equipped with Autopilot sensors and compute, that could significantly increase Tesla's lead in collecting data for Autopilot and also grow the fleet for deploying robotaxis (as well as any future OS/software entertainment that could be future revenue streams).

Btw if this is true and if the agreement is essentially Toyota paying Tesla license and royalty fees for it's FSD software and the electronics that go with it.......this greatly increases the odds that Tesla becomes the de facto Autonomy provider. Getting Toyota on their "platform" would be huge. It would cement them as a software provider of probably the most valuable piece of software for the next 20-30 years and it would increase their data collection, furthering their lead in autonomy

I don't think that's what is being proposed. Maybe I'm interpreting it differently than others but this seems like a deal where Tesla is being paid for providing software and the electronics that go with that software as well as helping the implementation of said electronics into the car platform. The software no doubt being Autopilot/FSD. Tesla could care less what Toyota does with the cars...what type of batteries they put in it, how efficient the motor is, etc.....That's for Toyota to deal with.

This.

The margin for Tesla selling software to another OEM approaches 100%. This is the ideal way for Tesla to pad profits. I'm pretty sure Tesla collects all the data.

We aren't talking Hyundai or Subaru here. This is Toyota!

I sure hope this is true. Can't wait for the exact details.

The market thinks Tesla has the best software/technology and Toyota is the best manufacturer, so the market will view this as a match made in heaven. Could be exciting times for any TSLA shareholders who happen to be here.

If this is how Tesla finally breaks into the Japan market, I'm totally fine with it.

View attachment 649182

Tesla provide the gut, Toyota stamps the body and assemble. Customer subscribes FSD and supercharger directly from Tesla.

Now this is properly big and crazy!

I'd share my quick thoughts on the Tesla-Toyota rumor.

From a general perspective, it's really a win-win for both. Basically, Toyota is recognizing the software/electronic prowess that Tesla has instead of developing on their own... coming from THE largest legacy car maker in the world (by market capand volume until recently), it's a statement that Tesla is up there with the big boys and all that FUD about how once competition from legacy comes, Tesla's advantage would go away. This just proves the FUDsters wrong. ("Tesla's solution is so good, even Toyota needs to get it from them") Not to mention that I'm sure that if FSD is in that discussion, Tesla would sure secure the access to data.
For Toyota, they gain the ability to provide a competitive product while continuing able to use their production lines.

From a TSLA investor's perspective, just as I've previously said about Apple iCar case... I truly believe it is in Tesla's best interest to sell as many "components" (be it software, electronics/motors, FSD, batteries... etc) as possible because as the world transition to EV, scale is what's going to decide the leader in the market. R&D and production costs on these parts are considered fixed cost for anyone. The more it can sell, the more denominator it has to spread the costs. If Tesla keeps everything in-house, and not selling to anyone, it could very well have the best of every single part, but it would definitely not be the cheapest because all cost can only be spread onto Tesla EVs. And we all know that throughout history of products, the best doesn't always win. It's usually the one that makes the most financial sense.

Think how Sony produces a vast of imaging sensors and sells any of them, including their top-end chips to many other camera makers out there. It's done this way because it needs to be able to split the cost, recover it as soon as possible and that allows it to continue to develop cutting-edge technologies in the field.

As long as TSLA gets paid for their effort, and continue to lead the industry in term of technology, it would always be the leader and able to offer the best products because they will always be a step ahead of anyone else. Tesla can implement a new solution as soon as it's developed, other companies would need to test them, make sure the price make sense... etc.. etc

And for anyone worrying that Tesla is giving its secret sauce away, don't worry too much. Elon has long stated, the machines that build the machines are the ultimate product. As Tesla continue perfecting the craft, they will always have the best machines/solutions building their EVs. Parts are... just parts... they are less relevant in the grand scheme of thing.

Since Tesla is battery constrained I don't see the value in this. The battery situation isn't going to get better any time soon since Shanghi is expanding and Berlin and Texas are coming on line this year.

Any car that Tesla makes with Toyota will be more expensive and less efficient than what Tesla could do by themselves. Unless Toyota switched to a Tesla designed, EV-only, casted platform.

The more I think about it, the more I think this is fake news designed to pump Toyota's stock, not Tesla's.

 

[MC3OZ]

Any car that Tesla makes with Toyota will be more expensive and less efficient than what Tesla could do by themselves. Unless Toyota switched to a Tesla designed, EV-only, casted platform.

Assuming the rumor was true, this is the most logical way to proceed.

Like all good rumors, it is logical enough to be believable, with some supporting circumstantial evidence. (i,e,. the Tesla staff meeting)

But the journalist only wants the clicks, we don't know how good their source is.

 

[EVWatcher]

Fun way to find out you are one someone’s ignore list

 

[Buckminster]

I feel like you would know. But I also feel like Tesla wouldn’t be selling ZEV credits and would never consider opening up the supercharger network if your assessment is correct. Meanwhile working with Toyota to expand FSD and Tesla App Store market share increases Tesla’s ability to scale things that will continue to fund the mission. So I’m torn on taking you for you word.

If it came out that Toyota was open to outsourcing FSD and infotainment to Tesla and Tesla turned them down I’d be pretty disappointed to be honest.

edit: I’m not imagining that Tesla said they were interested in licensing out the battery manufacturing process they developed am I?

 

[Featsbeyond50]

I hope this is true but it sounds like reverse FUD to me. Toyota leadership is way too prideful for this type of deal. They will go down with the ship even if there's plenty of lifeboats available.

 

[CLK350]

For the record, the source of this news is Korea's local daily newspaper Chosun Ilbo with an exclusive report on a purported renewed partnership between Tesla and Toyota, first spotted in a Tweet from JPR007

Here is a translation of the Chosun Ilbo reported rumor

[Exclusive] Will Tesla and Toyota make half-price electric cars? Partnership imminent

...

It is reported that Tesla and Toyota have reviewed the partnership since last year and are approaching the final stage.

According to an official from the Japanese automobile industry on the 28th, Tesla and Toyota are considering jointly developing a small electric SUV platform (the car's basic skeleton). The partnership review has been conducted since last year. Toyota provides the vehicle platform to Tesla, and instead, Tesla provides some of the electronic control platform and software technology onboard its vehicle to Toyota.

When the partnership with Toyota is established, Tesla will be able to launch a compact SUV electric vehicle at low cost using the Toyota platform. In addition, sales of Tesla in Japan, which are around 1,000 units per year, are likely to increase significantly.

Tesla's CEO Elon Musk said at the company's new technology public event'Battery Day' in September last year, "We will release a $25,000 (half-price) electric car in 2023." However, among experts, there were not few opinions that it would be difficult for Tesla to find a way to sell electric cars at such low prices. Tesla introduced a semi-mid-sized electric car'Model 3'in 2017 and a mid-sized electric SUV'Model Y'in 2020, and then released an electric pickup truck'Cyber Truck' within this year. However, the details of the'half-price electric car' that will be released in 2023 are not yet known.

Elon Musk, chairman of Tesla, USA, leading the global electric vehicle industry./AFP Yonhap News

On the other hand, Toyota can also significantly reduce the resources and time spent on innovation of its vehicle's integrated electronic control platform (ECU) and operating system (OS) by using Tesla technology. Toyota is evaluating that the integrated ECU and OS technology that can control and improve vehicle functions through wireless updates (OTA) is lagging behind Tesla. In other words, through cooperation between the two companies, Tesla can reduce the cost and period of developing small electric SUVs and Toyota's ECU and OS development. It aims for a win-win effect by reducing the time it takes for the two companies to compensate for each other's weaknesses, allowing them to focus more on their own strengths.

....

 

[TSLA Pilot]

Is this a one-source rumor, or is any other news source reporting this story as well?

While plausible, I'd feel more inclined to believe it if there was more behind it.

 

[jeewee3000]

Tesla's CEO Elon Musk said at the company's new technology public event'Battery Day' in September last year, "We will release a $25,000 (half-price) electric car in 2023." However, among experts, there were not few opinions that it would be difficult for Tesla to find a way to sell electric cars at such low prices. Tesla introduced a semi-mid-sized electric car'Model 3'in 2017 and a mid-sized electric SUV'Model Y'in 2020, and then released an electric pickup truck'Cyber Truck' within this year. However, the details of the'half-price electric car' that will be released in 2023 are not yet known.

See bolded text, which is obviously the original article copy pasted into translation software.

The source of the rumour is implying that experts think it will be difficult for Tesla to price an electric vehicle at or below 25.000 USD.

The article then implies that Toyota is better positioned for this task.

If the above (i.e. my interpretation of the source article) is correct, I have to object. Toyota can mass manufacture vehicles at low prices, no problem. Mass manufacturing a BEV however, they cannot. Let alone at low price points. Tesla is best positioned to provide cheap BEV's since they have the lowest battery cost.

Therefore I have my doubts about this rumour. The only reason I don't discard it right away is because it coincides with the Tesla call a few days ago. "Think bigger"... This would be very big.

If the rumour turns out to be true, Tesla better make Toyota pay through the nose.

 

[CLK350]

See bolded text, which is obviously the original article copy pasted into translation software.

The source of the rumour is implying that experts think it will be difficult for Tesla to price an electric vehicle at or below 25.000 USD.

The article then implies that Toyota is better positioned for this task.

If the above (i.e. my interpretation of the source article) is correct, I have to object. Toyota can mass manufacture vehicles at low prices, no problem. Mass manufacturing a BEV however, they cannot. Let alone at low price points. Tesla is best positioned to provide cheap BEV's since they have the lowest battery cost.

Therefore I have my doubts about this rumour. The only reason I don't discard it right away is because it coincides with the Tesla call a few days ago. "Think bigger"... This would be very big.

If the rumour turns out to be true, Tesla better make Toyota pay through the nose.

I think it may be best to view that rumor or possible future collaboration news as announced here from the perspective of Toyota and its allies - they have to see /show it as a gain for them. Besides, what Toyota also brings is branding and sales/ service reputation that will assuage the more common mass media conditioned folks, those who would not consider a BEV.

My take is that it is very plausible, and whatever comes of it will be in the best interest of Tesla and its mission, as well as Tesla as a business:

Since all BEV's are battery constrained, this is not going to impact Tesla's production for the coming year at least - but it can help Tesla's revenue as it can sell parts, software or some know how. Figuring the sale prices for Toyota is best left to Tesla's experts. More BEV's by Tesla or anyone else is better for the mission and Tesla.

Besides the fact that Tesla is years ahead in car manufacturing/ design and accelerating if anything, Tesla is ALSO more than just cars, it's more like an incubator for mission oriented tech, as EMSK mentioned. Once freed from car manufacturing, they can redirect resources to other areas, mostly ENERGY: the utilities (huge opportunities for disruption, and Tesla has already started as you are aware, but there too, battery supply is the limiting factor), the HVAC home housing market together with the solar roof, and whatever they may be planning already.

In true WS fashion that news will not impress the bean counters/ financial reports anal-ysts. The FUD crown will probably spin it in the opposite way, in whatever silly fashion they can invent. So no effect on TSLA for some time IMHO, not until some shift happens, money wise (earnings) or perception wise.

I also like that if this materializes, it would bring in another real contender in the BEV field besides Tesla, VW and "the Chinese, aka Xpeng et al".
The way all carmakers play the coming years sure is interesting to watch - the one unknown that is not mentioned much and would save the Lidar gang is V2X (vehicle to everything, ie other cars, infrastructure, pedestrians even). Now that would require massive investment, but considering the equally massive waste of money /USD /capital /energy we have seen in the past decade, it would absolutely make sense. Not expecting our politicians to want to understand that of course.

 

[Oveeus]

From posts here and on Twitter, I think many of the Tesla investors think this is bad news because teaming up with Toyota kinda make their ego hurts because they believe Tesla can do it alone.

However, just focus on Tesla's mission statement and think that for a second. It's about accelerating the transition... not making the transition.

If it's 3yrs to make a 25000 car, another 3 to make a minivan and another 3 to make something else... it'd be the opposite of accelerating.

And Tesla is seen as the industry leader because the entire market focuses on where Tesla is going and what it's doing. So, they will always "wait" for Tesla to do something, and then see if they can do it better in some ways or another.

A Tesla-Toyota JV would accelerate the timeline for whatever they had in mind. Allowing Tesla to really do what it wants to do, which might mean going after some completely revolutionary products rather than the tedious task to cost-cutting on current techs so that they can build a 25000 car.

I see it as a positive... for both achieving Tesla's vision and TSLA investment as a whole. Having TSLA to go and do it alone, it just involves risks and more importantly time that can ultimately be better used on something else. Cost-cutting has always been the lowest-tier manufacturer's job. I, for one, are happy if Tesla doesn't need to focus its resources on it for too long and instead make better EVs, batteries or FSD.

 

[Buckminster]

Toyota - 90% likelihood this is good
Tesla mission - 90% likelihood this is good
TSLA short term - 70% likelihood this is good
TSLA long term - 50% likelihood this is good

 

[CLK350]

Toyota - 90% likelihood this is good
Tesla mission - 90% likelihood this is good
TSLA short term - 70% likelihood this is good
TSLA long term - 50% likelihood this is good

IMHO
TSLA short term - 50% likelihood this is good
TSLA long term - 90% likelihood this is good

Because I trust Tesla's R&D plus their manufacturing prowess accelerating at warp speed is like a moat - the higher the demand for EV's the more Tesla can sell (as long as it can get enough batteries - and Toyota et al pushing for more is good news for Tesla).

 

[Oveeus]

Saw this on Twitter... thought it was super appropriate.

Tesla to Toyota:

 

[wws]

Should be mentioned that Toyota has already had a like relationship with Tesla - in the form of the RAV4 EV from a few years ago. Toyota held some shares of Tesla as well (which they are probably kicking themselves for selling.) Same story with MB.

 

[MC3OZ]

Here is a video from Dave on a possible Tesla / Toyota partnership.

I agree with most of what he proposed, but I think Toyota would need to purchase more components from Tesla.

If it happens, Toyota would be more serious and committed, on the second try.

 

[MC3OZ]

SMR - focused on the revenue implications..

 

[jeewee3000]

SMR - focused on the revenue implications..

Personally I got jaded with SMR videos. The older ones used to be his take on Tesla's valuation and future, outlining (at the time) bold predictions.

Nowadays it's mostly a clip of some analyst with Stephen talking smack about how Tesla will dominate all in between. The "deep dives" are reading aloud some article word for word.

And this Toyota rumor video is him pulling a figure out of his rear ($1000 of revenue to be precise) for every car Toyota would sell if Tesla licensed its software to Toyota for these vehicles.

So he's off my Tesla-news-sources-list for now. (But hey, he's the smart one. Gets a lot of clicks for little work).

 

[MC3OZ]

And this Toyota rumor video is him pulling a figure out of his rear ($1000 of revenue to be precise) for every car Toyota would sell if Tesla licensed its software to Toyota for these vehicles.

I agree on the effort level...

But his video did get me thinking I expect Tesla could be providing, motors, electrical components, FSD chips, software and other components, if anything I think his $1000 per car may be a bit low. But my mix of hardware components would be lower margin than pure software.

It also seems likely to me that the Toyota cars would use the Supercharger network,. Toyota may install some of their own Superchargers using components suppled by Tesla. Tesla drivers could use Toyota branded Superchargers.

IMO if it is happening, Toyota will be all in...

Seems to me it is in the interests of both companies and Toyota needs to do something, the alternative view is commercial negotiations can hit roadblocks and perhaps they never even seriously started..

Overall I think - Happening 60% chance, Not Happening 40% chance.

 

[LiveLong&Profit]

Been a few days - any consensus on the Toyota rumor yet?