business

Toyota ends tie-up with Tesla

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© 2017 AFP

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Smart move Toyota is a stand alone company that is actually making profits, while Tesla is living on Government taxpayer subsidies - tells us a lot about their business model

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Made money on the stock before the pyramid collapses, well done!

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This is really old news. I am not sure what was announced particularly, but I know that two years ago, or maybe three, Musk was insisting that Tesla still had projects with Toyota after their EV collaboration was cancelled, and Toyota strongly denied it.

I think of Tesla as a yappy chihuahua and Toyota as a reliable Dalmation or Golden Retriever. Toyota is a service dog and Tesla is kind of this twitchy, loud, high maintenance "rich people" dog. A long time ago, Toyota and GM had a joint venture and had a huge plant together in California. GM eventually gave up, so Toyota got the plant for next to nothing. Then it traded the plant to Tesla for a huge block of stock. It also produced some cars with Tesla, but they did not sell. Tesla went on to hype their own cars and jack the price up, and Toyota and Tesla have gone their separate ways. That was years ago.

Another wrinkle is the weird ideological split that has developed. Musk relies on making his vehicles with 100% battery power, whether that is efficient or convenient, or not. Toyota simply does what works for customers, keeps efficiency high, and keeps costs down. Friction arises when Musk makes claims that are just not true, and when he promises things he cannot deliver. He uses the old tools of Bill Gates: FUD and vaporware.

Whatever. Tesla will now have to try to mass produce cars profitably. It has not ever done either of those things. If it can survive the next few years, it will be a much different company. Toyota just makes cars people want, and it keeps making them better as it moves to better technologies incrementally. It seems stodgy, but is it? To me, it is Tesla that is wedded to an idea so strongly that it cannot escape and grow. Toyota is the company that is still free to innovate and strive for better things.

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