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Summary:

UPDATED: Electric car startup Tesla Motors plans to buy the NUMMI plant in Fremont, Calif. and start building its Model S sedan there in 2012. Toyota has agreed to partner with the startup and buy a $50 million stake after Tesla’s IPO.

UPDATED Tesla Motors, the electric car startup backed by $465 million in government loans, will help Toyota build a new electric vehicle in California, according to Governor Arnold Schwarzenegger. Speaking at a Google event on Thursday, the Governator said that Tesla and Toyota are “forming a partnership, where they take one of the Toyota cars and make them electric” (h/t SF Business Times and Sacramento Bee).

Schwarzenegger was scheduled to attend a press conference this afternoon at Tesla’s powertrain facility in Palo Alto, Calif., and seems to have jumped the gun on news Tesla hoped to break at the later event. It’s unclear at this point what type of relationship may be in the works between the Silicon Valley upstart and the Japan-based hybrid leader and Prius maker, which has been beleaguered lately by massive recalls.

Tesla has long said it aims to supply battery pack and powertrain technology to major car companies. Germany’s Daimler picked Tesla last year to supply up to 1,000 battery packs and chargers for a trial of the electric Smart Fortwo in Europe. However, as Tesla has acknowledged in filings with regulators ahead of a planned IPO, “There is no guarantee that we will be able to secure future business with Daimler as it has indicated its intent to produce all of its lithium-ion batteries by 2012 as part of a joint venture with Evonik Industries AG. If Daimler goes through with this, we are likely to lose the only customer in our powertrain business.”

Toyota FT-EV concept

Toyota, meanwhile, has said it plans to launch a plug-in hybrid version of its Prius hybrid in 2011, followed by an all-electric vehicle designed for short distances by 2012. Previously, the company has described plans to roll out an electric model based on the FT-EV (pictured in concept form at right) for short urban commutes.

Toyota’s manufacturing operations in California ended just last month. The company partnered with General Motors back in the 1980s to produce cars at the recently shuttered NUMMI (New United Motor Manufacturing Inc.) in Fremont, Calif., which produced its last car in April and went up for sale earlier this month. The end of GM and Toyota’s partnership and production at the facility triggered the loss of more than 4,700 jobs.

Schwarzenegger did not say at the Google event on Thursday where the cars resulting from Tesla and Toyota’s new partnership would be built.

Update: Tesla released some of the details of its deal with Toyota and future manufacturing plans late Thursday. Toyota has agreed to buy a $50 million stake in the startup after the closing of Tesla’s planned IPO — a significant vote of confidence in Tesla from the hybrid leader. In addition, the two companies plan to “form a team of specialists” to “cooperate on the development of electric vehicles, parts, and production system and engineering support.”

The San Francisco Business Times, reporting from an ongoing press conference at Tesla’s Palo Alto powertrain facility, writes that Tesla CEO Elon Musk says he will buy the NUMMI plant and start building the Model S there in 2012.

Plans for the Model S factory site have been shaken up repeatedly over the last two years, with a plant initially slated for New Mexico, then San Jose, Calif., then Southern California. Since last year, Downey, Calif. officials have said a deal to locate the Model S assembly line on part of a former NASA site in the area was “99.9 percent done.”

According to a report from The Downey Patriot on Thursday, Downey Mayor Pro Tem Luis Marquez learned today that Tesla will be opting for the NUMMI facility in Fremont when a reporter called for comment. “It is shocking the amount of time and effort that has been needlessly wasted by Downey due to Tesla misleading the City; their actions are unconscionable” Marquez said in strongly worded statement issued Thursday after the city confirmed Tesla’s plans with Musk. “The question must now be asked if Tesla plans to reimburse all the costs associated with their underhanded negotiation tactics,” said Marquez.

For more research check out GigaOM Pro (subscription required):

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How EV Battery Startups Can Cross the Valley of Death

Photo credits Tesla and Toyota

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