Electric Car Factory May Rev Up SoCal Economy

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Could Tesla Motors Inc., a startup founded by PayPal billionaire Elon Musk that manufactures high-end electric cars, soon give a jolt to the L.A. economy?

The San Carlos-based company is eyeing several sites in Southern California to build a factory for Tesla’s Model S, an all-electric four-door sedan. Tesla will unveil the vehicle later this month at Hawthorne-based Space Exploration Technologies Corp., a Musk startup that builds rockets.

Rachel Konrad, a Tesla spokeswoman, declined to specify whether any of the sites Tesla is scouting are in L.A. County. But she did say Tesla is looking at mothballed aerospace facilities of around 500,000 square feet and there are several in regions like the South Bay.

Tesla originally planned to build its Model S factory at a site in San Jose, but had to seek another location in order to qualify for a $350 million grant from the U.S. Department of Energy. The government agency said preference would be given to applicants who build on a so-called brownfield site essentially an abandoned industrial facility and Tesla’s San Jose location didn’t meet that requirement. In order to get a shot at the funds, out of a pool of billions sought by automakers, the company is shopping for land.

“We are very committed to building on a brownfield site,” Konrad said. “And when you think about building on brownfield sites in California, there are two areas of concentration: mothballed chip factories in Silicon Valley and mothballed aerospace facilities in Southern California.”

If Tesla decided to build in the L.A. area, it would create several hundred new jobs and make the region the cornerstone of what Tesla hopes will be its bread-and-butter vehicle. Tesla is aiming to price the Model S at around $60,000 and once its new Model S factory is built, Tesla plans to manufacture around 20,000 vehicles a year.

In contrast, the company’s only car in production so far, the Tesla Roadster, is a high-end all-electric sports car that costs about $110,000. The Roadster is assembled mostly in England and the company plans to build about 1,200 this year.


Ad Man

It goes without saying that Robert Kotick, chief executive of Activision Blizzard Inc., is a video games guy. But at a recent talk sponsored by Town Hall Los Angeles, the head of the world’s largest video game publisher made clear that he has his eye on another business: advertising.

Advertising inside video games from a billboard beside a virtual street to a product a character uses in game is a growing business. According to some estimates, spending on in-game ads could hit around $2 billion by 2010.

In his recent Town Hall speech to local business leaders and students, Kotick said Activision is hoping to one day reap huge revenue from ads in some of its most popular franchises, including “Guitar Hero” and the “Tony Hawk” skateboarding game, and the company will be expanding its in-game ads in the future.

Activision already does some in-game advertising. For instance, players of “Guitar Hero: World Tour” could see images of a giant Kentucky Fried Chicken bucket at a concert arena in one part of the game.

Kotick said “Guitar Hero” is an attractive platform for advertisers because of its vast reach. For every one unit of “Guitar Hero” that Activision sells, the company calculates three different people will play it for about 100 hours per person per year. With “Guitar Hero” having sold 300 million units worldwide, that comes out to 9 billion hours of game play.

“That’s bigger than ABC, CBS and NBC combined,” Kotick said.


ESolar Deal

ESolar Inc., a Pasadena company that builds solar thermal power plants, announced last week that it will receive $30 million in financing from an Indian company, along with a licensing agreement for use of eSolar’s technology to build power plants in India.

ESolar inked the deal with Acme Group, which is based in Northern India and owns companies involved in wireless communications, food storage and energy production. Acme plans to break ground on its first power plant using eSolar technology later this year.

The Indian funding makes eSolar one of a growing number of local companies that have sought foreign backing as domestic financing becomes tougher to get. The

Caltech/MIT Enterprise Forum in Pasadena has scheduled a panel discussion Saturday with a focus on how companies can tap into the Indian market for capital and business relationships.


Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225, ext. 230.

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