Tesla fuels new Palo Alto jobs

Feb. 2, 2010, 12:03 a.m.
Tesla fuels new Palo Alto jobs
The Stanford Solar Car Project, which Tesla has sponsored, showcases its innovative vehicle. (ISAAC GATENO\The Stanford Daily)

Tesla Motors, maker of the electric Roadster two-door sports car, has received $465 million in U.S. Department of Energy loans — part of which will be used to build a new facility in Palo Alto.

The Department of Energy estimates that, together with another plant planned for southern California, the loan will create 1,600 jobs in the company’s plants over the next few years. The deal was finalized Jan. 21.

Palo Alto Mayor Pat Burt expressed optimism about this development and anticipated that the company will find a favorable environment in Palo Alto.

“We have all the great research that is being done at Stanford in a myriad of eco-friendly fields,” Burt said. “We have the support system.”

Burt stated that the city’s clean tech “ecosystem” is “one of the greatest opportunities for Silicon Valley — possibly the greatest.”

Perhaps indicative of that “ecosystem,” Tesla’s new facility will be located just down the street from the headquarters of A Better Place, a company that has met international success in creating electric vehicle infrastructure support.

News reports have indicated that Tesla’s southern California site will focus on the forthcoming Model S electric sedan, while its Palo Alto plant will manufacture vehicle equipment for the existing Roadster model’s power train and other vehicle manufacturing companies.

The Tesla Roadster, which currently retails at $109,000, is advertised as twice as efficient as the Toyota Prius, with a battery that can take the car over 200 miles between charges and achieve a zero to 60 mph time of 3.7 seconds. As of December, Tesla had sold just under 1,000 Roadsters.

Last week, an announcement released with Tesla’s initial public offering IPO stated that the company intends to end production of the Roadster in 2011. The Model S will become available in 2012, assuming that production goes as planned.

The company’s plans for the Palo Alto plant once Roadster production ends remain unclear. Tesla spokespeople did not immediately return a request for comment.

The new Model S will be a four-door vehicle with a predicted retail price of $49,900 after federal tax credits. It is designed to travel approximately 300 miles on a three- to five-hour battery charge.

The young company’s entry into Wall Street may signal a breakthrough for the clean tech industry, though Tesla has not been profitable thus far; the company has lost $236.4 million since its 2003 founding. Ending production of the Roadster also means a shrunken revenue flow until the Model S hits the market.

But Tesla’s move to Palo Alto could point to new opportunities and closer ties between the company and Stanford.

In fact, the University’s connection with Tesla has its roots in the Stanford Solar Car Project: several years ago, the group secured support from Tesla CEO Elon Musk.

Sasha Zbrozek ’10, who formerly headed the Stanford Solar Car Project, worked for Tesla in the past as a mechanical engineering intern. He predicts that the company will increase efforts to reach out to students.

“They largely picked the location for its proximity to all these Stanford people,” Zbrozek said.

He further added that the Stanford solar car served as a template for an early version of Tesla’s battery technologies. Given these recent developments, Zbrozek believes that Silicon Valley has the potential to succeed in the clean tech industry, though he also sees China as a strong competitor.

Zbrozek said that he enjoys working in the industry because of its innovative freedom and he feels “that the work is beneficial on the larger scale.”

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