Tesla Going to Make an Electric Luxury Sedan at New Facility in California

Tesla Motors Inc. plans to build a $250 million facility to manufacture a zero-emission luxury sedan in the heart of Silicon Valley. The nation’s leading all-electric car company will also relocate its corporate headquarters and research and development efforts to a consolidated campus in San Jose, Calif.

Tesla President and CEO Ze'ev Drori announced Wednesday that construction on the 89-acre site would begin in the summer of 2009. When fully operational, the facility will employ approximately 1,000 workers.

Tesla selected San Jose in part because the region already enjoys a high concentration of highly skilled engineers and support infrastructure. The factory – expected to achieve gold certification from U.S. Green Building Council Leadership in Energy and Environmental Design (LEED) – will be 20 miles from the current headquarters in San Carlos, minimizing inconvenience for more than 250 employees.

“Big deals like this happen when both parties have something significant to gain,” said Drori, who praised San Jose Mayor Chuck Reed’s 15-year “Green Vision” job-creation initiative. “Locating Tesla’s headquarters, manufacturing and R&D in San Jose will allow us to proceed with minimum disruptions and virtually no dislocations.”

Model S is Tesla’s zero-emission, five-passenger luxury sedan powered by a lithium-ion battery pack. It is expected to have a base price of about $60,000 and get about 240 miles per charge with exceptional performance. The first sedans will likely roll off the assembly line in late 2010.

Tesla’s first production vehicle is the Roadster, a zero-emission, all-electric, two-seat sports car. On sale now in the United States and Europe, the Roadster is assembled at a Group Lotus PLC factory in Hethel, U.K. Tesla has no plans to move Roadster production.

Tesla, which has delivered about 30 Roadsters so far, announced last week it was ramping up production amid scorching demand. About 1,200 people have put down deposits to reserve a Roadster.

Tesla also announced recently a string of high-profile hires with deep industry expertise. Executive Vice President Mike Donoughe, who spent 24 years at Chrysler, is overseeing Tesla’s Model S and Roadster programs. Chief Financial Officer Deepak Ahuja was formerly controller at Ford. Chief Designer Franz von Holzhausen, former director of design for Mazda North America, is designing the Model S.

“Tesla has amazing momentum right now. The excitement within the company is palpable,” said Tesla Product Architect and Chairman Elon Musk. “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.”