Tesla Motors hits up state governments for money

Will states pony up the money for an electric car plant?

Electric-car specialist Tesla Motors is on a cross-country road trip, and it's asking for millions of dollars from state legislatures.

Last month, the company met with the governor of Michigan, which is putting together an incentive proposal to get the company to build a car assembly factory in the state. (Tesla has separately agreed to build an engineering facility in the state.) The factory would be used to build the company's passenger vehicles, code-named White Star, due in 2009.

This month, California Assemblyman Kevin de León, D-Los Angeles, has put together a bill, called AB 255, with Mark DeSaulnier that would create a $45 million technology fund, according to the San Jose Mercury News. DeSaulnier said Tesla is looking for $20 million over a 10-year period, according to the paper.

The money would be raised by tacking $4 onto the smog abatement fee when individuals register any car.

A representative for the company declined to comment on the California proposal but said the company would look after its interests. It also plans to talk with New Mexico. That state, run by , has actually invested directly in technology companies in the past.

Tesla has raised more than $40 million in venture capital.

Tech companies seeking money from governments isn't exactly new. Google recently got $100 million in concessions from North Carolina in exchange for promising to build a data center. The Tesla proposals do differ slightly from the typical pattern. For one thing, these grants often go to established companies like Intel or IBM, which have an extensive record for job creation. Tesla came out of stealth mode just last year.

Concessions usually come in the form of tax breaks or infrastructure improvements that don't require necessarily out-of-pocket payments. AP 255 appears to contemplate a payment, at least according to the Mercury News story. California voters have frowned on this. Proposition 87, which would have empowered a state panel to award a few billion dollars in grants to ethanol companies, was rejected by California voters last year.

Still, competition among states and governments for marquee companies is strong, and some small companies are landing deals. New York recently gave New Hampshire's Mascoma, a cellulosic-ethanol company, $14.8 million in grants to build a plant in the Empire State. Mascoma is required to work with a couple of other New York institutions as part of the grant.

Although he declined to comment on the California legislative proposal, the Tesla representative did give some new details on White Star. There are actually two White Star vehicles in the works. The cheaper one is set to cost less than $50,000 and last about 130 miles. It will also accelerate from 0 mph to 60 mph in just 6.7 seconds, according to the rep. A more expensive version is designed to hit 60 mph in less than 6 seconds and to last about 200 miles. Both cars are designed to seat four adults.

The Tesla Roadster, a sports car set to hit the road later this year, has a range of about 225 miles and can hit 60 mph in just 4 seconds, the company says. It also has a bigger battery. Tesla has booked orders for more than 220 roadsters so far.

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About the author

    Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.

     

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