Tesla has scrapped plans to build an electric car plant in Silicon Valley, saying Friday that it will opt for an abandoned factory elsewhere in order to win a low-cost federal loan.
Tesla announced in October that the dismal economy had effectively slammed the door on its hope of getting 100-million-dollars in venture capital money to build a “Model S” sedan plant in the city of San Jose in Silicon Valley.
Construction of the factory, about 20 minutes from Tesla's headquarters in San Carlos, California, was to begin in mid-2009.
Tesla had picked an 89-acre lot on which to build a 500,000-square-foot plant to pump out four-door, all-electric sedans.
It would have been the first time the vacant lot was used for heavy industry.
Tesla is competing with other car makers for low-interest loan money the US Department of Energy has available to fund development of “brownfield” sites, factories or plants no longer in use.
Tesla wants a 250-million-dollar loan to build a sedan plant.
“We cannot do anything that may jeopardize securing the federal loan,” said Tesla senior communications manager Rachel Konrad.
“That's one of the reasons we are now planning to develop on a brownfield site instead of the greenfield site in San Jose.”
Tesla is in “late-stage” negotiations with another site for its Model S sedan plant and expects to begin production in 2011 as originally planned, according to Konrad.
Tesla says that in March it will unveil a “Model S” car its Hawthorne, California, design studio.
The “Model S” car is a five-passenger sedan run by a lithium-ion battery pack that is expected to power the car for about 240 miles (385 kilometers) per charge. The car has an estimated price of 60,000 dollars.
Tesla's other zero-emission car, the two-seat “Roadster” sports car, is assembled in Britain and sold in Europe and the US with a 109,000-dollar starting price.
Tesla, founded in 2003, specializes in the environmentally-friendly, electric cars that many car manufacturers are starting to produce.
Investors in the company include PayPal co-founder Elon Musk and Google founders Serge Brin and Larry Page.
