SAN CARLOS, CA --- Ze’ev Drori, CEO of Tesla Motors, and California Gov. Arnold Schwarzenegger recently announced that Tesla's upcoming electric-powered four-door, five-passenger sedan will be manufactured in California. 

Previously, Tesla announced that the sedan manufacturing facility was planned for Albuquerque, New Mexico. But after a thorough review of the program, Tesla decided to build manufacturing facilities near the engineering and research and development functions in Tesla’s San Carlos headquarters. Tesla’s battery pack, a critical component of the Tesla Roadster, is currently manufactured in California. Final assembly of the Tesla Roadster is also in California.

"Today’s announcement is incredible news for California's economy and its environment," Schwarzenegger said. "If California was a baseball team this would be like winning the first round draft pick and recruiting a player who is a perfect fit on our roster because Tesla Motors and its all-electric cars belong in California." 

Recently, the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) approved a new program that exempts new zero-emission vehicle manufacturers from paying sales and use tax on the purchase of manufacturing equipment. The goal is to encourage ZEV manufacturing in California. Tesla will also be eligible for at least $1 million in Employment Training Panel Workforce Development Funds to train employees. 

"These vehicles can play a big part in helping California successfully implement its groundbreaking laws to fight climate change," said State Treasurer Bill Lockyer, who chairs CAEATFA. "By offering this financial incentive, our goal is to ensure zero-emission vehicles realize their full potential in our state.  In the bargain, we believe the policy will bolster our emerging green economy, create good-paying jobs and reduce our dependence on foreign oil. I'm very pleased the policy helped convince Tesla to build its high-performance electric cars in California." 

Tesla’s sedan, which is targeted for late 2010 production, will use Tesla Motors' electric powertrain design. The exact location of the manufacturing facility within California will be decided soon.

Drori remarked: "Make no mistake --- we are not a niche player with a car only for the rich and famous. As our agreement with the state so clearly demonstrates, we are building a high volume zero emission vehicle, manufactured in California for mid-range family use. And we aren't going to stop there. We will continue on and build even more affordable cars."