At a press conference today at Tesla Motors San Carlos, CA headquarters California Gov. Arnold Schwarzenegger announces a planned all-electric sedan will be built in California. Tesla's follow-up to the existing electric sports car, the Roadster will be a four door, five passenger sedan called Model S.

Previously, Model S has been known by the code name White Star. Unlike the low-volume (fewer than 2,000 per year) $109,000 Roadster, the Model S is expected to start at $59,000 with production volumes of 10,000-20,000 units per year. 

Earlier this year, Tesla representatives indicated the Model S would be offered in a pure battery electric version and a rang- extended version similar to the Chevrolet Volt. In a recent interview with AutoblogGreen, Tesla Chairman Elon Musk revealed the company had decided against the range-extended variant and would instead focus on only battery powered cars.

In 2007, Tesla announced plans to build the White Star sedan in Albuquerque NM, with most of the components being provided by outside suppliers. In the same interview, Musk discussed what it would take for Tesla to thrive long-term. "In order for Tesla to be successful we have to be good at all the things that are necessary to build a great car company. So sure there's a vast technology development; there are also all the other pieces of car... design, suspension, body, high production, supply chain management, key systems."

Following the difficulties Tesla has faced in launching the Roadster into production, CEO Ze'ev Drori undertook a review of the logistics of the Model S program and came to the conclusion that, "the best strategy to ensure the success of the program would be to locate the manufacturing operation in California as close to our headquarters as possible."

To facilitate smoother production of the Model S, Tesla intends to forgo the global supply chain that was originally envisioned for the Roadster.

"So, with the sedan, we're going to be much more centralized. So that's one of the big lessons. We're going to a higher level of production – we're going from 2000 units a year to 20,000 units a year with the sedan," Musk told AutoblogGreen.

To help facilitate manufacturing of electric vehicles in California, Gov. Schwarzenegger has announced a new incentive program under the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) that will waive state sales taxes on equipment purchased for that purpose. The state also will issue new white stickers for zero emissions vehicles that will allow drivers to use high-occupancy-vehicle (HOV) lanes. These new stickers are distinguished from the yellow stickers currently available for car-poolers and some hybrid drivers.

The Model S is expected to have a range of approximately 225 miles on a charge, similar to the smaller, lighter Roadster. Unlike the Roadster, which uses a carbon fiber body shell, the Model S will use an aluminum body. At today's press conference, Musk reiterated that Tesla's goal was to "produce mass market electric cars." 

Beyond the Model S, Musk today reiterated plans for the company to build an even more affordable electric sedan in the $30,000 price range within four years.  This model could be built in volumes of 100,000 or more annually.

JUNE 2008