Monday, February 09, 2009

Tesla Motors on Mare Island?

Recently, Tesla Motors announced that they will not locate its head office and manufacturing plant in San Jose. Tesla was not able to raise the $100 million in venture capital funding it had counted on to finance the facility, and has now has applied for $400 million in two federal, low-interest loans through the Advanced Technology Vehicle Manufacturing Program. This federal loan program favors brownfield sites on which closed factories or plants need to be rehabilitated. Sounds like a perfect fit for Mare Island. Lennar Mare Island (LMI) has been competing to bring Tesla Motors to Mare Island since 2006. Tesla representatives have toured Mare Island and are very familiar with it. Tesla is looking for existing structures totaling 500,000 square feet. LMI is currently preparing a revised summary of available manufacturing and office buildings to send to Tesla. The short-term goal is to have Tesla take another tour of Mare Island. They apparently will select a new site within a few weeks. Timeline of Tesla Contacts 2006 Tesla finalized its plans to build electric cars. Their search for a manufacturing location included several California locations as well as New Mexico. In August, LMI organized a Tesla visit to Mare Island. LMI and the City discussed possible locations and incentives, and prepared and submitted a site plan. 2007 Tesla announced plans to site their $35 million manufacturing plant in New Mexico. 2008 Tesla cancelled their New Mexico plans. Factors included the long distance from research and development and engineering teams located in the Bay Area, as well as the desire to qualify for California's Alternative Energy and Advanced Transportation Financing Authority program worth approximately $1 million to Tesla. LMI renewed their dialogue with Tesla, and the City sent a letter of support. In September, Tesla announced that they selected the San Jose site. 2009 In January, Tesla announced that the San Jose site was no longer feasible given current economic conditions and poor venture capital environment. They also announced that they are seeking a brownfield site so they can qualify for alternative funding sources. LMI has renewed contact with Tesla again. Their brownfield concept is not well defined yet, but it is required for alternative funding sources. Tesla has indicated that if they cannot find an ideal solution, they will expand their search into Southern California as well as other states.