Tesla to move operations to Palo Alto

Palo Alto (CA) – Electric vehicle maker Tesla is to open a new power train facility in Palo Alto. The company will also develop and manufacture electric vehicle(EV) components for other auto makers in a renovated building in the Stanford Research Park.

Tesla will also move its corporate headquarters from San Carlos to the site. Roughly 350 employees will work in Palo Alto initially, with space for up to 650. Tesla says the 369,000 square foot facility on the 23 acre site will supply all-electric powertrains for its own vehicles and other companies, accelerating the availability of mass-market EVs. Construction is expected to begin in early fall.

“Silicon Valley and the Stanford Research Park are synonymous with innovation and entrepreneurship,” says Tesla CEO and Product Architect Elon Musk, pointing out that the site was formerly occupied by Hewlett-Packard and is close to the garage in Palo Alto where Bill Hewlett and Dave Packard built their original audio oscillator.

“It’s an ideal place for a new car company trying to rethink many aspects of the traditional automotive business.”

Tesla is already producing EV components for Mercedes. The company will build the new electric version of the Smart city car using Tesla battery packs and chargers. Tesla says it expects to announce other powertrain deals in the coming months.

The company is also in negotiations for an assembly plant for its upcoming Model S. The sedan will be produced at a separate assembly plant in California, not at the Palo Alto site and is planning to relocate employees from its offices in San Carlos in several phases over the coming months.

Financing will come in part from loans from the US Department of Energy. In June, Tesla received approval for about $465 million in low-interest loans to accelerate the production of affordable, fuel-efficient electric vehicles. The loans are part of the Advanced Technology Vehicle Manufacturing Program, which provides incentives to new and established automakers to build more fuel-efficient vehicles.