Toyota CEOAkio Toyoda, Tesla CEOElon MuskandCalifornia governor Arnold Schwarzenegger have held press conference in Palo Alto, California to announce that both companies will be working together on electric vehicle development and manufacturing, with Toyota spending $50 million in private placement of Tesla stock.

Tesla and Toyota plan to use the recently closed ex-Toyota NUMMI plant in Freemont, CA, USA with Model S production expected to bring back 1,000 workers and output 20,000 cars a year, with that output expected to increase as new models are added. The plant could soon expand to as many as 10,000 workers, and approach it’s previous capacity of 300,000 cars per annum.

The Model S is on track for production in 2012. No information is yet available on any technology or process sharing deals between Tesla and Toyota, but Tesla is expected to benefit greatly from Toyota’s mass production expertise and efficiency.