Tesla cancels plans to move to San Jose
Tesla's plans to eventually build a pair of new factories for the Model S and powertrain components in San Jose, CA have run into a ditch. The move was announced last September, just before the (official) collapse of the world's financial markets. However, the plan ran into trouble quickly when Tesla was unable to complete a $100 million round of Series E venture funding. Not long after that, the up-start nearly ran out cash before existing investors put in another $40 million. The bulk of the $400 million required to build the two factories and move its headquarters from San Carlos to the new San Jose campus were expected to be provided by low interest loans from the Department of Energy.
However, the DOE loan program favors redevelopment of existing industrial sites and the San Jose location was a greenfield. Tesla is now looking for new locations including former factory sites in both the Silicon Valley area and Southern California. Without the DOE money, it will be extremely difficult for Tesla to build anything new and getting that loan will be increasingly problematic. The program requires applicants to raise matching equity investments of 20-30% of the loan amount, which in this case would amount to $100-150 million. Since Tesla already failed to raise that much last fall, it's not clear that it can happen now.
[Source: BizJournals.com]
Reader Comments (Page 1 of 1)
ajmalzx 5:21PM (1/29/2009)
This company will go bust in less than a year. Building cars at a loss, who do they think they are, Sony?
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Gary Blomquist 12:27PM (1/30/2009)
Folks........Think "Tucker"?
Anyway, I really don't have too much sympathy for the Tesla situation, as it is just another "niche" vehicle that will sit in the driveways of folks that are in the stratospherical area of income.
We need a "people's" hybrid, not these expensive roadster one's making the headlines...........
Even the Prius is priced way up above the Civic hybrid as they load them up with options. At least the Civic hybrid can be had with basic, but sufficient equipment.
Anyway......I just don't get my panties in a bunch over the plight of these ultra expensive "niche" market hybrids.
Give me a civic hybrid, or a nice clean burning diesel Jetta.......in the low $20k price range. Also, you won't find it parked alongside of a Porsche, Jag, Escalade, at my house, as I'm truly a middle class purchaser.......A rare breed in danger of extinction.
Good luck to Tesla, if they find a California industrial site that is useable for new construction of an assembly plant. I life in Silicon Valley, and there are a lot of old industrial sites in San Jose, Mountain View, Sunnyvale, Milpitas, etc... Trouble is they'll run into big expenses with environmental impact studies, like you won't believe.
If our politicians would get their collective heads out of the sand, and start thinking about our 2.5-3 trillion barrels of oil locked up in shales in the U.S. and the mammoth Oil Sands deposits in Canada, we would be out of the woods in a short time.
Tesla Ch. 11 5:42PM (1/29/2009)
So when does Tesla file for Ch 11? I am going to guess by June.
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homunculus 6:10PM (1/29/2009)
artie lange or tesla motors? anyone?
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The Luigiian 6:52PM (1/29/2009)
Wow. Tesla's still around in the midst of this recession?
Man, their investors must have deep pockets and a lot of patience. And guts.
And stupidity.
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RLQ 7:47PM (1/29/2009)
This will be a big set back for San Jose.
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Doug 7:54PM (1/29/2009)
Tesla Motors = FAIL
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Joe Black 8:42PM (1/29/2009)
No really sure how this company ever planned to make money or break even...just buy a Lotus and dim the lights in your McMansion...the total cost of ownership will equal out for the economy and the environment.
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sam 9:48PM (1/29/2009)
This company seems totally incompetent.
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Fox 12:20AM (1/30/2009)
This is good, it makes little sense to setup a factory in San Jose, one of the most expensive places in the US...
The city of San Jose was eager to have them here, but at a huge cost to taxpayers...
Let them build out in the central valley, then they can have cheap land and maybe help out places such as Tracy...
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UltimoDragon 12:21AM (1/30/2009)
Who would have seriously thought that Tesla would be responsible for more destined vaporware than ZAP Electric Cars? We sort of knew ZAP was run by crooks, Tesla might be run by well-meaning idiots.
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TomdeTomTom 3:02AM (1/30/2009)
Oh well....
Does this mean they can now afford to return their MSRP's back to the levels people pre-ordered them at?
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ronnie schreiber 3:24AM (1/30/2009)
Elon Musk claims that the Roadster is now profitable and that by mid-summer the company will be operating in the black.
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Pat NCN 6:14AM (1/30/2009)
Er, eh?
Musk has just admitted to Autocar that they're losing money on every one built:
http://www.autocar.co.uk/News/NewsArticle/Tesla-Roadster/237374/
autoflogger 6:55AM (1/30/2009)
I hope the Tesla dies a quick and painful death...I'm tired of the knee-jerk hyoe over the crappy pos.
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howard 2:27AM (1/31/2009)
There is a large manufacturing facility vacated by Johns Manville in Grayson County Texas right on the RED RIVER and Highway U.S.75 the north South corrodoor from the Gulf of Mexico to the Canadian border! With plenty of land for expansion! It has all rail and truck facilities and an Airport with an 8,000 ft runway, the new 289 highway runs right past it on the West side! all Utilities are in place and there are 350 work days a year without Ice and Snow! A large work force is available! This should be exactly what TESLA needs to produce their vehicles!
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