Tesla Model S - front three-quarter view

New Mexico may be The Land of Enchantment, but at least one developer from the state is less than charmed with Tesla Motors.

The electric-vehicle maker has been sued by Rio Real Estate Investment Opportunities for what the developer says was an agreed-upon deal for Tesla to produce its Model S battery-electric sedan in New Mexico, according to website Gigaom.

Tesla allegedly reached an agreement in early 2007 to have Rio Real Estate build a 150,000-square-foot factory and lease it out to the automaker for $1.35 million a year for 10 years. Instead, Tesla decided to start Model S production in California after reaching an agreement with Toyota in 2010 to make the cars at the old NUMMI Toyota-General Motors joint venture plant in the San Francisco Bay Area. We asked Tesla for comment on the matter, but spokeswoman Shanna Hendriks told AutoblogGreen that the company does not comment on pending litigation.

Tesla, which in June started deliveries of the Model S, said last week that its second-quarter loss widened by 84 percent to $106.5 million because expenses jumped and revenue fell as the company geared up for the car's debut.