Tesla and Toyota to make electric cars in Fremont, not Downey

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Toyota CEO Akio Toyoda, Tesla Motors CEO Elon Musk and California governor Arnold Schwarzenegger laugh during a news conference at Tesla Motors headquarters May 20, 2010 in Palo Alto, California.

Toyota and Tesla are joining forces to develop and manufacture electric cars. They’ll do it at a recently shuttered auto plant in Fremont, in Northern California. The heads of the two companies and California Governor Arnold Schwarzenegger held a news conference on Thursday in Palo Alto to announce the deal. The news left the city of Downey, which thought it had a deal with Tesla, in shock.

Tesla CEO and co-founder Elon Musk stood with Toyota President Akio Toyoda. As an interpreter translated his remarks into Japanese, Musk applauded his counterpart’s speed in negotiations.

"Toyota was just as fast as Tesla," Musk said.

Tesla is buying the New United Motor Manufacturing Incorporated (NUMMI) plant in Fremont. Toyota has operated the facility in a partnership with General Motors. The plant closed down early last month, and thousands of workers lost their jobs.

In the next few years, many of them could return to build Tesla’s electric Model S sedan and other vehicles. Toyota is buying $50 million of Tesla stock, and that's what Downey City Councilman Mario Guerra figures sealed the deal.

"We’re just in complete shock, surprised. And we feel very betrayed," said Guerra .

Downey had expected Tesla to make its Model S there. Guerra said he and his colleagues worked for more than a year with Tesla. They voted to approve a deal with the auto maker last November. Guerra said they were just waiting to announce it.

"This was going to back to our roots. We’re high technology. This was going to be literally in the same building where the Apollo capsules were built," Guerra explained, referring to the facility's history of designing and building spacecraft for NASA.

Tesla CEO Elon Musk said his company had explicitly mentioned to Downey the possibility of a deal with the plant in Fremont. He called Downey a "great location."

"You know, in the future, when, say SpaceX or another venture is looking for expansion, I think Downey would be one of the first places we look."

SpaceX is the space transport company Musk co-founded. Musk also makes a cameo appearance in the film “Iron Man 2.” That film was shot in Downey, on the same property Musk and Tesla just turned down.

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