Not far from the Computer History Museum , Tesla Motors confirmed on Wednesday they are building a $250 million (USD) facility to manufacture a zero-emission luxury sedan in the heart of Silicon Valley.

 San Jose California Mayor Chuck Reed said that Tesla will locate the new manufacturing facility for its electric cars on an 89-acre site near the San Jose Water Pollution Control Plant. The proposed assembly line is projected to begin producing electric sedans in late 2010, and will employ about 1,000 people when it is fully operational.

Tesla plans to build what was originally code-named the "WhiteStar" and now known as the Model S, a 4-door, 5-passenger sedan which will be introduced as a 2010 model. The Model S is estimated to get 225 miles on a single charge and to cost around $60,000 (USD). The Model S will use a variant of their Roadster's all electric powertrain, which is the first vehicle built by Tesla. It's expected to make about 280 hp (SAE) and 280 lb-ft of torque.

Previously it had been announced that Tesla's sedan manufacturing facility was planned for Albuquerque, New Mexico. After a thorough review of the program, Tesla decided that it would be highly advantageous to build manufacturing facilities close to the engineering and research and development functions in Tesla's San Carlos headquarters. Tesla's battery pack, a critical component of its existing Tesla Roadster, is currently manufactured in California. Final assembly of the Tesla Roadster is also in California right now.

Governor Schwarzenegger and the State of California also made it clear that they wanted to keep Tesla manufacturing in California. The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), approved a new program that exempts new zero emission vehicle (ZEV) manufacturers from paying sales and use tax on the purchase of manufacturing equipment and will encourage ZEV manufacturing in California. Tesla will also be eligible for at least $1 million in Employment Training Panel Workforce Development Funds to train employees. Tesla Motors has secured $100 million in private-equity financing, and the federal government has come forward with $150 million in loan guarantees.

Tesla Motors has facilities in England, next door to Lotus Cars in Hethel, England, which are responsible for design of the Tesla Roadster. The Tesla Roadster chassis sub-assembly is currently being assembled by Lotus. The Roadster's all electric powertrain and final certification are done at Tesla's San Carlos, CA, Headquarters.

In early July, there were several photos of a Dodge Magnum wagon “mule” which was supposed to have the Tesla Roadster electric drivetrain. Tesla did not confirm or deny the existence of that vehicle. There were also photos of a new four-door sport sedan design by Lotus of England. Many auto industry experts attribute that vehicle to being the prototype of Tesla's Model S.



The Tesla manufacturing plant announcement comes a day after General Motors unveiled the production version of its extended-range electric vehicle, the Chevrolet Volt , which also is due out in late 2010. The Volt will be in the $40,000 price range compared to the Tesla's $60k. The Chevy Volt will have a smaller electric motor, a smaller battery, and a gasoline engine so it will be a PHVC (Plug in Hybrid Vehicle) as we discussed in our June articles. X

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