Tesla to Build the “Model S” Electric Sedan in San Jose

San Jose Mayor Chuck Reed must be happy. Tesla plans to announce Wednesday morning that it has decided to build its Model S electric sedan in a 600,000-square-foot plant in San Jose, Calif., on an 89-acre plot of land that will also include new company headquarters. The company says construction on the plant will begin in the summer of 2009.

Tesla announced in June that it would manufacture Model S in California, instead of New Mexico, which prompted speculation over which Northern California city would win the electric car maker’s business. Supposedly the short list included San Jose, South San Francisco and Vacaville.

But San Jose mayor Chuck Reed has been one of the most vocal champions of bringing green jobs and cleantech firms to San Jose, so we’re not surprised the car maker landed there. In front of a group of investors and entrepreneurs at the AlwaysOn GoingGreen conference this week, Reed said San Jose would make it easy for cleantech firms to open headquarters and manufacturing plants in the city, and asked companies what it would take to get their business there. Reed told the New York Times that the Tesla plant could create 1,000 green-collar manufacturing jobs.

Tesla’s CEO Ze’ev Drori told the WSJ that the company is raising $250 million in new financing — including new private financing led by Goldman Sachs and a loan guarantee from the Department of Energy — to get the plant built. The news comes the same month that Tesla said it has finished work on its final powertrain and is working with BorgWarner on a single-speed gearbox.

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