Tesla Motors to build factory for Sedan model

SAN JOSE, California — Detroit's automakers may be shuttering factories in the wake of a dramatic downturn in auto sales, but Tesla Motors is in a buoyant expansion mode. The electric-car startup plans a $250 million Silicon Valley plant and headquarters here in advance of a second model line that is due out in late 2010.

Tesla Motors was expected to make an official announcement about the new plant sometime on Wednesday.

Tesla Motors intends to roll the first $60,000 Model S, a five-passenger sedan, off the San Jose assembly line during the fourth quarter of 2010. Tesla CEO Ze'ev Drori told the Associated Press that the automaker expects to build 15,000 units of the Model S during the first year of production. The Model S is noteworthy because it is $49,000 cheaper than the two-seat Tesla Roadster, which has been described by some as little more than a toy for the rich.

The Wall Street Journal reported that Tesla is lining up financing for the plant, including a loan guaranteed by the U.S. Department of Energy and a new private capital round led by Goldman Sachs Group. Tesla may also benefit if the U.S. government agrees to provide automakers with loans to finance production of high-mileage and advanced-technology cars.

What this means to you: An affordable vehicle from Tesla Motors inches ever closer to your driveway.