Tesla to build electric car plant in California
In a surprise move, Tesla Motors will build its electric-car factory in the San Francisco Bay Area, not New Mexico as previously announced, California Gov. Arnold Schwarzenegger said Monday.
Schwarzenegger, along with California Treasurer Bill Lockyer, said the state was able to provide Tesla with incentives, including the waiving of state sales tax on $100 million worth of manufacturing equipment, to entice the company to build its assembly plant there.
"We want these cutting edge companies not just to start in California and do their research and development here. We want them to build in California," said Schwarzenegger who toured the Tesla headquarters with Lockyer Monday before his announcement.
The exact site has not been selected, but a decision between two locations should come soon, said Darryl Siry, a Tesla vice president. The company will seek a location not too far from its San Carlos headquarters so that its engineers can travel back and forth. Lockyer said Tesla had looked in Hayward, Calif., but has now rejected a location there.
If Tesla were to choose to locate in one of California’s Enterprise Zones, it could see additional tax breaks, Schwarzenegger said. In the Bay Area, those zones - which are used to stimulate business development in depressed areas of the state - are in San Jose, Oakland, Richmond and Watsonville, among other cities.
In early 2007, the state of New Mexico said Tesla was going to build a 400-employee factory there, to build Tesla’s second model, a four-door, five-passenger electric sports sedan for $60,000. The car company was supposed to break ground by spring of 2007, but that never happened because Tesla ran into engineering delays with its first car, a two-seat, $109,000 roadster. It has since begun delivering those cars.
The notion of Tesla, a California start-up, building cars in New Mexico "drove me absolutely insane," said the governor, who is on the waiting list for a Tesla Roadster.
"We always wanted to be in California," Siry said, but building a factory here is "prohibitively expensive" and New Mexico was seen as a cheaper, close-enough alternative. "But when the governor and state came back and changed their offer it allowed us to do what we originally wanted to do," he said.
Last week, the California Alternative Energy and Advanced Transportation Financing Authority, which Lockyer chairs, adopted a program exempting makers of zero-emission cars from paying sales and use taxes on equipment. The state actually will buy the equipment for the assembly plant, and lease it to Tesla, which will then not have to pay sales tax on it once Tesla buys the equipment. That will save Tesla about $8 million on $100 million worth of equipment, Lockyer said. The company also is eligible for at least $1 million in training funds.
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