UPDATED May 21 11am
Electric vehicle manufacturer Tesla has formed a partnership with Toyota to build an all-new electric sedan in California.
In the deal, Toyota will invest $US50 million in the Silicon Valley-based brand, while Tesla will acquire the New United Motor Manufacturing Inc (NUMMI) factory for production of the Model S.
The all-electric Model S sedan will join the $US109,000 Roadster in 2012 with production to peak at 20,000 per year. The move comes after the US Government loaned it $US465 million to build an all-new, more affordable electric vehicle.
Toyota is on the record as committing to a mass-produced electric vehicle by 2012, and the partnership will assist Toyota in its development of the Prius Plug-In Hybrid, a competitor for rival Japanese manufacturer Nissan and its Leaf, due to launch in the US later this year.
Toyota hopes to make the car available within two to three years.
The NUMMI factory originally facilitated the joint venture between Toyota and General Motors in Fremont, California, and ceased production in April.