Wanted: Tesla Model S Factory Site, Take Three


So it looks like San Jose, Calif., may not be getting the Tesla Motors Model S factory after all. While the Silicon Valley electric sports car maker said in September that it planned to build an assembly plant for its second-generation vehicle at an 89-acre plot between Zanker Road and Highway 237, Tesla spokesperson Rachel Konrad tells us this morning that the company is seriously considering other sites. “We never gave up on other contingency plans throughout the state,” she said. (hat tip to The San Jose Business Journal.)

Tesla is now especially interested in moving the planned facility to a “brownfield” — such as an old site for chipmaking in Silicon Valley or land left over from the aeronautics industry in Southern California — that can be rehabilitated and built upon instead, as the San Jose Business Journal reports.

That’s because the Department of Energy loan program through which the company intends to finance construction (or at another site, retooling) of the facility favors projects on brownfields (two birds, one stone: environmental cleanup and cleantech development). The Zanker Road site is an undeveloped “greenfield,” and could weaken Tesla’s application for $250 million in federal funds for the assembly plant.

And as Konrad pointed out, the company cannot afford to jeopardize those loans. During the application process, she said, “It became clear to us that the other automakers had no shortage of brownfields,” because of the history of manufacturing in Detroit and the Midwest. Committing to a greenfield would put it at a disadvantage, and California has no shortage of brownfield sites, she noted. Tesla, which wants to keep R&D close to Silicon Valley’s engineering talent pool, would needlessly compromise its request for funds if it didn’t consider them, Konrad added.

“We know all the reasons Zanker Road made sense, and it still might make sense depending on how things shake out,” Michelle McGurk, a senior policy adviser to San Jose Mayor Chuck Reed, tells the Business Journal. The big question mark is whether or not Tesla receives federal funding or ends up turning back to private investors for the sedan factory.

This isn’t the first time Tesla has shaken up its factory plans. Less than a year ago the company planned to build the factory in New Mexico. In June, California Governor Arnold Schwarzenegger joined then-CEO Ze’ev Drori in announcing that Tesla, headquartered in San Carlos, had decided to come back to California (thanks in part to at least $9 million in incentives). As recently as September, the San Jose mayor cheered cheered Tesla’s decision to build on the Zanker Road site — a project he said would bring 1,000 jobs to the city. All bets are not off yet: Konrad said the company may still use Zanker Road for another facility — either  a powertrain plant (also in the running for DOE funds) or the Tesla headquarters.


Comments are closed.