Tuesday, February 3, 2009

Watch Dog correction on Tesla...

Watch Dog readers know that we have been following the Tesla story for some time. (For a review of the stories, you can read them here, here, here, here, and here.)

But when we make a mistake on our site -- we must make corrections.

We learned from Tesla's spokesperson that we misstated some information previously -- so below is a reprint of an email that we received late yesterday from Rachel Konrad, Tesla's spokesperson. It is below, unedited:


Hi. I realize you are super busy and are simply aggregating information elsewhere, but your blog post about Tesla says "spokeswoman Rachel Konrad said the company couldn't raise $100 million in venture funding to make the move to San Jose." That's not accurate, and if you could correct the post I would appreciate it.

Tesla announced in September the intention to build an assembly plant to manufacture our four-door, five-passenger, all-electric sedan. The site was an 89-acre vacant lot in San Jose on Zanker Road, known as a "greenfield" site because there has never been construction on it.

However, we reconsidered the San Jose site for a variety of environmental and financial reasons. One reason was that the US Department of Energy is awarding low-interest loans to automakers who develop "brownfield" sites (in other words, sites that used to be factories or plants but have been abandoned, mothballed or shut down).

Tesla is applying for a roughly $250 million federal low-interest loan that would finance a 500,000-square-foot assembly plant to build the sedan. Tesla does not want to jeopardize our low-interest loan application, and we believe that building from scratch on a greenfield site would put us at a competitive disadvantage against other automakers and suppliers competing for the $25 billion in low-interest federal loans.

We are in late-stage negotiations with another site to build our sedan, known as the Model S. We will likely have an announcement about the site soon. Tesla is still on track to begin production of the Model S in 2011; it will take roughly 24-30 months from the time Tesla secures financing to begin producing cars off the assembly line.

We still plan to unveil the Model S to the media and public in March in Hawthorne, Calif., where Tesla's design studio is located.

Rachel Konrad

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