Electric Car Maker’s Shifting Factory Plans a Real Buzz Kill

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It looks like Tesla Motors Inc. has pulled the plug on plans to build its electric car factory in Los Angeles County for now.

Things have changed since two months ago, when Tesla Chief Executive Elon Musk stood in a Hawthorne hangar and confidently proclaimed the company would build its first automotive factory in the L.A. area. Musk claimed the company had terms for an unnamed site, and sources told the Business Journal that location was a 78-acre defunct Boeing Co. airplane plant in Long Beach.

But Tesla couldn? close the deal on the property and is now looking at a location in Northern California, a source familiar with the situation told the Business Journal.

The two parties had a ?andshake agreement?on the site at the time of Musk? announcement, but then details of the deal could not be hammered out, the source said.

It? not clear what exactly caused the deal to stall. Tesla recently received a cash infusion when Daimler AG bought a 10 percent stake in the San Carlos-based company that was reportedly worth $50 million. But it? not certain what impact that had on its finances and in turn whether that may have influenced the company? choice of location for the factory.

Even though Tesla may be looking elsewhere to build its first factory, it? still possible the company could return to Los Angeles.

? don? think anything is over until it? over,?the source said.

A Tesla spokeswoman declined to comment.

Boeing spokesman Glen Golightly said the company was continuing talks with Tesla. But the aerospace giant was ?ntertaining anybody with a serious offer.?p>Tesla? factory would produce the Model S, an all-electric four-door sedan the company plans to put into production in 2011. Musk unveiled the Model S in Hawthorne at the facilities of Space Exploration Technologies Corp., a startup he founded that builds rockets.

The Model S factory would be Tesla? first manufacturing plant for large-scale production. Its current car, the Tesla Roadster, is built in limited numbers, primarily in England by Group Lotus Plc.

Tesla initially planned to build its factory in Northern California near its Silicon Valley headquarters. But if the company built on a ?rownfield?site ?an abandoned industrial facility that requires some cleanup ?it would be eligible for a $350 million government grant, money it needed for the construction of the project.

Tesla? original factory location did not fit the brownfield criteria, so the car maker started hunting for a site that did. The Long Beach facility, which had recently fallen out of escrow, seemed to fit its needs.

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