Tesla to Build the "Model S" Electric Sedan Back in California

It’s official: Tesla Motors has named its electric sedan (codename WhiteStar) the “Model S” and the company says it has decided to bring the manufacturing of its vehicle back to California. We just got out of a press conference at Tesla Motors headquarters in San Carlos, Calif, where California Gov. Arnold Schwarzenegger, California Treasurer Bill Lockyer, Tesla Chairman Elon Musk and Tesla CEO Ze’ev Drori made the announcement and did a photo opp tour of the Tesla factory for a room full of media. (See our photos below).

So that nixes Tesla’s former plans to build its sedan in a factory in New Mexico — New Mexico Gov. Bill Richardson must be having a bad day. Gov. Schwarzenegger, on the other hand, was straight-up gleeful over the steal, and said that when Tesla had previously decided to manufacture in New Mexico it “drove me absolutely insane. My administration does not like to lose.” And of course he had to slip those Schwarzenegger lines in there, saying he’s happy that Tesla “will be back to California.”

Tesla CEO Drori (pictured on the right, next to the Governor) said in blog post, which the company just put up, that Tesla wanted to manufacture its sedan “as close to our headquarters as possible.” Drori writes that having the manufacturing facility and HQ close by, gives the company “operational advantages.” California is also Tesla’s most important market to sell into in the U.S., so proximity to Cali is important on that front, too.

But perhaps the biggest issue is that California decided to offer Tesla some key incentives that are more competitive than the ones New Mexico was offering. These include: a newly approved program that exempts green car builders from paying sales tax and use tax on the purchase of manufacturing equipment, and a grant program for training employees. Tom Dresslar, a spokesman for the state treasurer told the San Francisco Chronicle that the equipment incentives could save Tesla as much as $9 million.

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At the press conference Musk and Drori emphasized that Tesla is a company that always intended to make electric vehicles low-cost and mainstream. Unlike its first vehicle, the luxury $100,000 Roadster, the Model S sedan is projected to cost $60,000. Musk said if the company could have produced a low-cost car first, they would have done that.

Musk also said Tesla has a project in the works to to deliver an electric vehicle for under $30,000 “a lot sooner than everyone thinks.” When pressed for how long that would take, he said: “4 years at the most.”

So why make the official name for the codenamed WhiteStar so incredibly dull? — WhiteStar was actually pretty fun. They chose a modest name on purpose. Tesla’s VP marketing and business development Darryl Siry told us that the point is to make Tesla the main brand, and not to dilute the brand with additional marketing terms. Guess they didn’t like our naming attempts. (From left to right: Schwarzenegger, unknown, Lockyer, Drori, Steve Westly, and Musk)


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