September 18, 2008

Tesla to manufacture in San Jose

By Carol Rosen
Editor

Tesla Motors is building a $250 million facility in San Jose to make its all-electric sedan. The first cars are expected to come off the assembly line in 2010.

The Tesla Roadster (above) has proven extremely popular; the proposed Tesla Model S sedan will be built in San Jose.

The announcement was made Wednesday morning by officials of the electric carmaker, Mayor Chuck Reed and state officials at the 89-acre future site on Zanker Road near Highway 237. Construction of the assembly plant is expected to begin next summer generating about 700 jobs.

Tesla plans to locate its manufacturing plant as well as its headquarters at the location, according to the company, which will open up about 1,000 jobs on land that is jointly-owned by the cities of San Jose and Santa Clara. The company will sign a 40-year lease with the first 10 years rent-free and production is expected to begin within the next couple of years.

Tesla’s president and CEO, Ze’ev Drori said the company selected San Jose because the region contains a large number of skilled engineers and support infrastructure.

“Big deals like this happen when both parties have something significant to gain,” said Drori who praised Reed’s Green Vision proposal. “Locating Tesla’s headquarters, manufacturing and R&D in San Jose will allow us to proceed with minimum disruptions and virtually no dislocations.”

The company’s product architect and chairman, Elon Musk, said the new site marks a significant milestone for the company: “Tesla has amazing momentum right now. The excitement within the company is palpable. The company has clearly taken production of all-electric vehicles to the next level and the Model S assembly plant will dramatically accelerate our growth.”

“California’s ground-breaking leadership on climate change is creating a market for clean technology that will not only change the world, but continue to help bring innovative jobs to our state,” Gov. Arnold Schwarzenegger said in a release. “I congratulate San Jose for helping Tesla, a cutting-edge car company, bring green manufacturing jobs to California, which will help build our state’s economy for the future.”

“The development of the San Jose Tesla facility brings us closer to our Green Vision goal of creating 25,000 clean tech jobs within the next 15 years,” said Reed. “The Tesla electric sedans will demonstrate how Silicon Valley’s ingenuity, entrepreneurship and creative talent can create solutions to global changes.”

Tesla chose the site for its access to transportation, high level of visibility and strategic location at Silicon Valley’s Innovative Triangle innovation center, which is home to more than 2,000 corporations including Cisco, eBay and other leading tech companies.

San Jose officials expect Tesla’s move to bring in related supplier and service companies to the area. “Just as automotive manufacturers located elsewhere throughout the world, Tesla will require supplier companies located near the new San Jose facility to smooth the progress of just-in-time manufacturing and inventory control, which will further spawn new jobs and opportunities in the region,” said Paul Kruttko, chief development officer of San Jose.

San Jose Silicon Valley Chamber of Commerce President and CEO Pat Dando praised the city staff and the mayor for bringing Tesla to San Jose. “Economically, any time you have 1,000 new jobs move into a city it’s something to celebrate especially nowadays. It’s a great win for San Jose. That’s exactly the bold, progressive leadership a mayor has to show today.”

Both the San Jose and Santa Clara city councils are expected to vote on the deal in the very near future. An agenda item is likely, according to the mayor’s office, to be on the council’s Oct. 7 agenda.

About Tesla Motors
Tesla Motors develops and manufactures electric vehicles with exceptional design, performance and efficiency, while conforming to all U.S. safety, environmental and durability standards. The Tesla Roadster is the only highway-capable production, zero-emission electric car of any kind for sale in the United States. It has a zero- to 60-mph acceleration in 3.9 seconds, a 14,000-rpm redline and the fastest top gear acceleration of any production car tested by Car & Driver magazine in 2007. The Tesla Roadster is unique in providing super car performance, zero emission and extraordinary efficiency. For more information, visit www.teslamotors.com.