San Jose, Tesla Suffer Huge Setback Over Stalled Plant

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

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    NEWSLETTERS

    TK
    AP

    When Tesla first announced some months ago that it would place a brand new electric car factory in Northern San Jose, it was an exciting new feather in the cap of Mayor Chuck Reed.

    He may have to take the cap off now.

    The San Jose Business Times reported Thursday afternoon that the car company could not get the $100 million in venture capital it needed to build the plant.

    Tesla's corporate headquarters is located in San Carlos on the Peninsula. The company builds its Roadster model in another state, but planned to build its new $60,000 sedan in San Jose. The Roadster costs more than $100,000.

    The Business Journal article quoted the mayor's senior policy advisor as saying that the city was looking at other car companies for the same site on Zanker Road.

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    Company officials said they still planned on building the plant, they just did not know where yet.

    The factory would have meant about 600 new jobs. It would have been located on Zanker Road near Highway 237.

    San Jose Mayor Chuck Reed said there is a silver lining. Other companies are interested in the site. He said the city maintains its interest in working with Tesla in the future as well.

    "We will continue to hold property for Tesla," he said. "They are uncertain about what they are going to do. This property has no income loss to the city."

    Tesla said it is looking at other sites in the Bay Area and Southern California that are more financially attractive. Company officials said they still plan to begin producing the new sedans in 2012.

    A bit of slick marketing:

    One of the company's best selling points with it's Roadster model is that it can travel from 0 to 60 mph in about 4 seconds.

    Only recently, company increased the price of the model to the people who were already on a waiting list.

    High-level officials at the company have said they believe they will get through the financial turmoil they have seen thus far.