EV Maker Tesla to Open Sedan Manufacturing Plant in San Francisco

EV Maker Tesla to Open Sedan Manufacturing Plant in San Francisco

A view of the road from the Tesla Roadster, the carmaker's first-generation EV.

By Scott Doggett, Contributor

Electric roadster-maker Tesla Motors will build a manufacturing plant for its upcoming electric sedan in the San Francisco Bay Area, California Gov. Arnold Schwarzenegger announced today at the company's Northern California headquarters.

Tesla had planned to build its second-generation plug-in electric vehicle, variously called WhiteStar and Model S, in New Mexico.

But, Schwarenegger told reporters, his administration increased the tax incentives it could offer Tesla and the fledgling automaker decided to build its manufacturing plant in the Bay Area. The exact location has yet to be determined.

The 2008 Tesla Roadster, the first modern production electric sports car, is built in England under contract by Lotus. Final assembly of the $100,000 roadster takes place at a plant adjacent to Tesla's headquarters in San Carlos.

The sedan "will be a $60,000 car and that's before any tax credits or other incentives are counted," Tesla Chairman Elon Musk said. "We have some projects in the works that could actually deliver a purely electric car for under $30,000, maybe a lot sooner than anyone thinks...probably four years at the most."

The WhiteStar, or Model S if you prefer, will produce zero tailpipe emissions and have a travel range of approximately 225 miles on a full charge. Company executives expect it to enter production by late 2010. Click here to view a statement Telsa released hours after the press conference, and click here to see Tesla CEO Ze'ev Drori's blog on the subject.

Standing at a podium with a Roadster behind him, Schwarzenegger said "last year it looked like Tesla Motors would build its electric cars in New Mexico. Now you have to understand I myself bought one of the first Tesla cars. So for me to see this company build a manufacturing plant in New Mexico drove me absolutely insane.

"But the fact of the matter is that my good friend (and New Mexico Governor) Bill Richardson offered better incentives than we could offer here in California, and so therefore they were thinking of going with the plant in New Mexico. But my administration, of course, does not like to lose."

Schwarzenegger, a Republican, said he brainstormed with staff members and Democratic state  Treasurer Bill Lockyer. He credited Lockyer with coming up with a proposed measure to waive the state's sales tax on investments in manufacturing equipment for zero-emissions cars in California.

Last week, the state Alternative Energy and Advanced Transportation Financing Authority adopted the proposal. For Tesla (and other automakers), that means many millions of dollars in savings when they invest in building a new manufacturing plant for zero-emissions vehicles in California.

The measure allows the financing authority to purchase about $100 million worth of manufacturing equipment, which would then be leased to Tesla. The automaker could buy the equipment from the state at the end of the lease terms without paying sales tax.

On top of that incentive, if Tesla (and other automakers) choose a California city where there's an enterprise zone, they could save additional millions of dollars.

And on top of that, Tesla (and other automakers) can also apply for funds from a new alternative and renewable fuel and vehicle technology program Schwarzenegger signed last year.

"When you add all of these up, we were able to put together a better package of incentives than New Mexico," he said.

Lockyer said the new plant will result in the creation of 400 white- and blue-collar jobs.

Richardson, New Mexico's governor, announced last year that Tesla would build a new automobile assembly facility in Albuquerque, bringing 400 jobs and a total capital investment of $35 million into the state.

"The New Mexico plant will be the company's first assembly facility in the United States," he said at the time. "The plant will be built on the West Side of Albuquerque, at Cordera Mesa adjacent to the new Tempur-Pedic plant. The 400 new jobs will pay between $24,000 and $100,000 a year, plus excellent benefits and stock options."

The governor had directed various state agencies to look into purchasing of 100 WhiteStar vehicles for the state fleet over a two-year period as a demonstration of the state's commitment to clean energy.
 
And Richardson had also invited Musk and Tesla Motors CEO Martin Eberhard to work with the state to develop a package of legislation for the 2008 session to encourage and incentivize the purchase of clean energy vehicles, including hybrid and electric vehicles.

So much for that deal. 

Scott Doggett:  is an AutoObserver.com Associate Editor.