California Tesla Sedan Factory: Where?

[doug]

KCBS - Tesla San Jose Expansion Hits Bump

Includes a one minute interview with Mayor Reed.

 

[TEG]

It is starting to make more sense why they have waited to show off the 'Model S' prototype...



In terms of California vs elsewhere, our 'Governator' already made a big deal of all the work he has done to convince Tesla to stay here. Us Californian's don't want to be disappointed like those in New Mexico (including their governor) who thought they would get the jobs, tax revenue, and image boost such a plant would bring.

(But yes, there are good reasons why Michigan would make sense too.)

 

[vfx]

...I don't understand Tesla's logic on that one: they would rather spend a quarter billion dollars on constructing a plant in CA then get an existing plant for next to nothing in MI....

Don't forget that New Mexico offered Tesla a lot of really sweet incentives to build a plant
there. Then Ca came along and made an even sweeter deal. Everyone wants them. They just stand back and let the offers role in...

 

[TEG]

Along with local subsidies for the plant, CA was going to do something about buying manufacturing equipment then leasing it back to the company. That deal likely isn't available outside of California.

 

[dpeilow]

Here we go...

San Jose, Tesla Suffer Huge Setback Over Stalled Plant | NBC Bay Area

Tesla can't raise money, stalls in effort to build factory

And

The company builds its Roadster model in another state

I've heard it said we are the 51st, but it hasn't happened yet.

 

[TEG]

http://www.nytimes.com/2008/12/02/business/02bailout.html

The Energy Department rules favor domestic automakers and suppliers. Manufacturing facilities eligible for the loans must be in the United States, along with all engineering and retooling. Preference is also given for modernization of manufacturing plants that are more than 20 years old, and most of the foreign automakers’ plants in the United States are more recent than that.

So not only does Tesla need to look for an existing building, but it helps to find an outdated manufacturing plant that is at least 20 years old and needs to be modernized. "Fixer-upper" anyone?

(Talk about jumping through hoops here)

 

[rsquared99]

dpeilow - I'm afraid there is little hope of attaining the status of #51. Too much of a language barrier.:smile:

 

[TEG]

If you are willing to adopt the phrase "The President's English" we might have cause to talk, but the King's gotta go.

While we are at it we might as well change the name of the language to "American" instead of "English"... :redface:

Do be aware that we have come up to speed on the idea of taxation without representation in the past 233 years. :frown:

 

[doug]

cbs5.com - Tesla Motors Backs Off Plan To Build SJ Factory

Plans for Tesla auto plant in San Jose appear doomed - San Jose Mercury News

Tesla Motor's plans to build a 500-worker auto assembly plant in San Jose appear to be dead.

Wanted: Tesla Model S Factory Site, Take Three Earth2Tech

Tesla gives up on San Jose move - Autoblog Green

 

[stopcrazypp]

cbs5.com - Tesla Motors Backs Off Plan To Build SJ Factory

Plans for Tesla auto plant in San Jose appear doomed - San Jose Mercury News



Wanted: Tesla Model S Factory Site, Take Three Earth2Tech

Tesla gives up on San Jose move - Autoblog Green

I just read some of those. It seems that it's not only the issue with the brownfields but that also tesla has to raise matching investments of 20-30% of the loan amount, or $100-$150 million. So now it's more clear why Elon is so anxious to get more investors and quick too. If he doesn't move swiftly, the Model S may be delayed even longer.

Tesla cancels plans to move to San Jose - Autoblog

 

[doug]

From our friend Chuck:

Tesla's Plan For an EV Factory in San Jose Fizzles | Autopia from Wired.com

 

[doug]

Tesla not ready to leave San Carlos - San Jose Mercury News



Here's local channel 2 news coverage. Includes video and sound bites of Rachael Konrad.
Tesla Motors Considers More Cost-Effective Site For Plant - News Story - KTVU San Francisco

 

[DDB]

I'm sure there are plenty of Chrysler and GM plants that would work for Tesla's purposes. I'm not sure if there are any close enough in California, but there's one right here in Dayton (Moraine), which GM shut down and canned 4,000 workers about a month ago.

 

[dpeilow]

Tesla scraps Model S manufacturing facility plans

Bad news for treehugging gearheads this morning. Tesla had originally planned on opening a new facility in San Jose to build the Model S electric sports sedan, but the financing fell through. (Welcome to America, Tesla) So as it stands now, the company is going to redirect a $450 million government loan that was originally going to help build the facility into the general budget which will help with the Roadster development.

Tesla still optimistically plans on building the BMW 5 Series electric fighter, but who knows when that will be. However, the company does plan on revealing a fully functional model on March 5. I wanna drive it. Can I drive it? Please?

Is that true?

I'm wondering whether releasing this news about San Jose on the back of last week is smart, but hey, it could all be part of some grand plan...

 

[thejump]

Along with local subsidies for the plant, CA was going to do something about buying manufacturing equipment then leasing it back to the company. That deal likely isn't available outside of California.

The problem with Tesla's management is their ego and the belief that Silicon Valley is superior to everything else.

As Elon himself had said, "Silicon Valley is the best in the world at everything it does," boasts Elon Musk, the PayPal (EBAY ) founder who sold the company for $1.5 billion before becoming Tesla's chairman and chief source of funds. "The corporate culture [in the Valley] is extremely efficient and very competitive." I hope by now he can push some of that hubris out of the way and recognize that Tesla is competing in a very complicated business and to be successful Tesla is going to have to look beyond the Silicon Valley backyard.

The point is, Tesla was offered an auto plant in Michigan for next to nothing. The reason the state of Michigan offered this was to keep the midwest economy going. It was a no brainer: an existing plant with no construction costs, no brownfield remediation, and having the best Tier I auto suppliers within a 30 minute drive for instant support. But, apparently MI is not good enough for Tesla.

Yes, CA offered a capital equipment lease back deal which would save Tesla hugh money, but they still need to remediate a brownfield and construct a partial or full plant, which will cost around $250M. Insisting on being in CA will cost Tesla $250M plus at least two years of construction. MI is free and now!!

The NM deal had a $20M tax abatement incentive. OK, so they save $20M but, again, they still need to build a $250M plant. MI is free and now!!!

Most businesses look to avoid excessive costs, not pursue it.

So what is it Tesla? Are you looking to manufacture a car and build a profitable company? Or is this just an ego-driven hobby?

 

[SByer]

I don't think that's a fair assessment of the costs of having manufacturing in Michigan. Michigan also comes with being a lot further away from where the design studios will be. I also think putting auto manufacturing where it's been proven that they're not very good at it is probably not the best way to go.

 

[dpeilow]

Tesla's San Jose factory stalled; outlook bleak - ContraCostaTimes.com

This appears to be turning into a bit of an avalanche. Is every journalist reading too much into this?

 

[doug]

DailyTech - Tesla's Plans for San Jose Facility Stall



Here's another local news report (ABC7 this time), again with video.
Tesla's South Bay plans stalled by economy - 1/29/09 - San Francisco News - abc7news.com
The video has some file footage from back in September (including some shots of Bob Sexton of WKTEC fame driving VP16 near the Menlo Park store) and then more of Rachael Konrad. Where was that interview taken? Is that San Jose city hall?

 

[thejump]

I don't think that's a fair assessment of the costs of having manufacturing in Michigan. Michigan also comes with being a lot further away from where the design studios will be.

The proximity between an auto company's design studio and their assembly plant is a non-issue with today's internet and communications technologies.

Consider the following best in practice companies:

Honda
Design studio: Pasadena, CA / Assy Plant: Marysville, OH

Nissan
Design studio: San DIego, CA / Assy Plant: Smyrna, TN , Canton, MS

Nissan
Design studio: Newport Beach, CA / Assy Plant: Georgetown, KY and many other locations

Mercedes
Design studio: Stuttgart, Germany / Assy Plant: Tuscaloosa, AL

I also think putting auto manufacturing where it's been proven that they're not very good at it is probably not the best way to go.

Wow! That news to me. Please elaborate how assembling cars in the midwest is 'proven' to be poor.

The Ford Wixom, MI assy plant was awarded JD Powers Platinum Plant Quality Award in 2007. The Platinum award is the top award given to the "single best plant in the world" for lowest quality defects.

If the thought of Tesla assembling in MI makes your skin crawl for no other reason that it's MI, then look no further then Honda in Marysville, OH or Toyota in Georgetown, KY or Evansville, IN. Some of the best built cars in world are assembled in the Midwest and there are many available assy plants all throughout the region that can be negotiated for pennies on the dollar.

Unfortunately, Tesla's management seems to lack the deep understanding of the auto industry that's needed to make cost effective decisions.

 

[stopcrazypp]

The proximity between an auto company's design studio and their assembly plant is a non-issue with today's internet and communications technologies.

I think what SByer forgot to mention was that along with the proximity with the design studio, is more importantly proximity to core customers (of which most are in the west, esp CA) and also with Pacific shipping ports (for the battery cells (in the future if Tesla is making a battery pack in their own factory), motors (from Taiwan right now), which are mostly made and shipped from Asia). So having the facility in the West definitely has some logistical advantages (saves time and shipping costs).
Edit: Battery packs being made in San Carlos now, so again in the West, though you can move the facility but you lose the advantage of close proximity to shipping ports for the battery cell.

However, you are right that most of the reasoning is to tap into the high tech/cutting edge image of Silicon Valley.