Tesla's 'Model S' San Jose Factory Might be Dead

Recession Squeezing Tesla
Last fall Tesla Motors announced a planned investment of $250 million to build a 500-worker new production plant in San Jose, California, to make its upcoming 'Model S' electric sedan. But since then, economic conditions have deteriorated quite a bit and there's a good chance that Tesla will be forced to look at other options.

Read on for more details.

From the San Jose Mercury News:

The company failed to secure $100 million in venture financing for the factory in the fall, and now realizes that the $450 million it hopes to get from government loan programs favor retrofitting existing buildings rather than constructing new ones in green fields, company spokeswoman Rachel Konrad said Thursday.

What Tesla will probably do is find an existing industrial site that it can buy and retrofit, and that might not be in San Jose (San Jose Mayor Chuck Reed says he's "disappointed somebody else is going to get a chance at the manufacturing facility for the sedan."). The good news is that 'recycling' an already existing site might actually be more efficient if a proper site can be found.

But even if the plant probably won't be in San Jose, there's a chance that Tesla will move its headquarters, R&D facility, and powertrain-assembly shop to San Jose from their current site in San Carlos (that's about 525 people).

The 'Model S' is still planned for 2012, but with uncertain loans and no manufacturing plant, I wouldn't be surprised if that date changed some more.

Via Mercury News

Photos: Michael Graham Richard

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