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Tesla warned in early December that without a $350 million loan from the federal government, the Model S sedan will be delayed and the company's planned move to San Jose, California to open a new HQ and manufacturing plant wouldn't move forward. Guess what? It's looking like it won't happen. The problem, as you might expect, is money, and the fact that Tesla couldn't raise enough money to finance the deal. Tesla spokesperson Rachel Konrad said that, "We abandoned that because the VC financing environment became so tight and difficult." One problem with the previously-selected location is that it's a greenfield site, where Tesla would build a totally new plant. With the low-interest loans that Tesla is applying for (about $400 million total, $250 million for the Model S plant and $150 million for a battery/powertrain facility), the government wants to see brownfield sites get developed. Konrad said that Tesla is looking to keep its headquarters in Silicon Valley and to search for a brownfield site where they can build the Model S.

Plug-in aren't dead in San Jose though. Recently, Coulomb Technologies installed EV charging stations in the city.

UPDATE: Tesla's Rachel Konrad told AutoblogGreen that Tesla wants to make it abundantly clear that, "This doesn't portend a delay for the Model S at all. The reason we are doing this is that we are extremely committed to a 2011 production date." Remember, the company said in October that it is applying for this DOE loan.

[Source: KLIV, New Mexico Business Weekly]

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