SAN CARLOS, CA – Tesla Motors' next product, a four-door, five-passenger sedan, will be manufactured at a California facility instead of Albuquerque, N.M, as previously announced. After a thorough review of the program, Tesla decided it would be highly advantageous to build manufacturing facilities in close proximity to 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 currently in California.

Governor Schwarzenegger and the State of California also made it clear they wanted to keep Tesla manufacturing in the state. "Today's announcement is incredible news for California's economy and its environment," the governor said, according to the company. "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."

Last week, 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 and will 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.

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