Part of the deal will involve Toyota purchasing $50 million of Tesla’s common stock, the companies said in a joint statement.

Tesla will acquire the recently shuttered auto-assembly plant for production of its Model S sedan, the company said at a news conference at its Silicon Valley headquarters.

Tesla has also partnered with other big automaker – Daimler AG – which took a 10 percent share in the company last year. Daimler later sold part of its Tesla stake to Aabar Investments in Abu Dhabi.

The Model S production will occupy only a small corner of the vast NUMMI plant.

Tesla has been granted $465 million of loans from the U.S. government to build a new lower-cost model. The company had been negotiating with the city of Downey, near Los Angeles, to build a production facility for its new Model S.

The companies said they would also cooperate on engineering and parts, as well as a production system. A specialist team will be formed with representatives from both companies.

Toyota stopped making cars at the NUMMI plant in April after a 25- year joint venture with General Motors.

Aurica Motors estimated it will need more than $1 billion in private and government financing to launch the factory and to retain the 4,700 NUMMI employees.

The company has built a prototype of the motor drive system that would be the core of the vehicle. The first of the company’s electric cars could roll off the assembly line in two years. Their batteries could be charged by plugging them in, or they could be swapped out “in three minutes” at a service site.

Aurica says the electric car will cost between costing $40,000 and $50,000.

New United Motor Manufacturing Inc. (NUMMI) was born in 1984 as a joint venture making cars for GM and for Toyota. GM has since pulled out of the plant and Toyota plans to stop making cars there at the end of this month.

At least 6,700 jobs will vanish when NUMMI shuts down. An estimated 4,700 people who work at the plant will lose their jobs. In addition, suppliers for NUMMI have announced NUMMI-linked job cuts that top 2,000.

[source: Green Tech Media]