Tesla Motors Inc. needs an electric-vehicle assembly plant somewhere in California. And the state's only auto factory -- New United Motor Manufacturing Inc. in Fremont, southeast of Oakland -- could be closed any day now.
So would Tesla like to buy NUMMI and keep the lights on? That would mimic a move announced today, in which Tesla plans to renovate a building in Palo Alto, Calif., for its powertrain operations and corporate headquarters.
Politicians and local civic leaders have been pitching the NUMMI idea to Tesla management in San Carlos, Calif. But it's an unrealistic proposal, says Tesla spokeswoman Rachel Konrad.
"We need about 500,000 square feet for our plant," which will assemble electric vehicles, Konrad explains. "NUMMI is 5 million."
Toyota Motor Corp. is in a quandary over what to do with NUMMI. In 1984, Toyota and General Motors created NUMMI as a joint venture, refurbishing a shuttered GM plant to produce Toyota and GM vehicles.
This year, GM walked away from NUMMI during its bankruptcy, leaving Toyota to decide what to do with the plant. Toyota has said it hopes to decide NUMMI's fate by early September. Most observers predict the plant will be shut.
Those urging Tesla to consider the NUMMI factory point to the terms of a $465 million loan package the automaker received in June from the U.S. Department of Energy. The low-interest government loan requires Tesla to refurbish a mothballed plant rather than construct a greenfield factory.
But Tesla's Konrad says the electric-vehicle startup is looking for assembly sites in southern, not northern, California.
"The auto industry isn't the only segment of the California economy that has been struggling," Konrad says. "We have a lot of mothballed plants to choose from. There are some aerospace and chip factories around here that have closed."
Still, the company said today it chose a site in San Franciscos southern suburbs for its powertrain operations and new headquarters.
Tesla will lease a 369,000-square-foot building in the Stanford Research Park in Palo Alto, near its soon-to-be abandoned corporate headquarters in San Carlos. It will start renovations in the fall at the facility, where it will develop and produce electric powertrains for Teslas vehicles and for customers such as Daimler AG.
Initially, 350 people will work in the Palo Alto building, which can hold up to 650 employees, Tesla said in a statement.
The start-up company said in January it is supplying battery packs and chargers to Daimlers electric Smart minicar, due for a U.S. launch in 2010.
Chrissie Thompson contributed to this report.