Tesla Motors to build Bay Area plant

Tesla Motors Inc. will build its next generation electric Tesla Roadster at a factory in the Bay Area.

"We will be doing this in the Bay Area to keep better control over production," said Tesla Chairman Elon Musk, in an e-mail to the San Francisco Business Times. "One of the mistakes that Tesla made early on was being too spread out around the world."

Tesla Motors, based in San Carlos, makes the Tesla Roadster, an electric sports car released in England in March with a $100,000 price tag. The company plans to release its next-generation vehicle, a sedan-style electric vehicle called the Model S, in 2010. The Model S is expected to cost $60,000. Tesla had considered building a manufacturing plant in New Mexico to produce the Model S.

But in his blog on the Tesla Web site, Tesla President an CEO Ze'ev Drori said he had thoroughly reviewed the car's operational and logistical elements since taking over the job early this year.

"One of the key conclusions was to challenge the merits of locating the plant and the program so far from our R&D and engineering teams in the Bay Area."

Ultimately, he said, the plant will be located "as close to our headquarters as possible."

Drori also cited being close to Tesla's "most important markets" and Governor Arnold Schwarzenegger's leadership on climate and energy issues as tipping points that kept the carmaker in California.

The state offered Tesla lucrative incentives to keep the company's manufacturing facilities in-state, including $100 million of tax-free financing for manufacturing equipment.

"We want these cutting-edge companies not to just start in California and do their research and development here -- we want them to build in California," Schwarzenegger said in a release.