Tesla to open new factory in heart of Silicon Valley

Fresh from announcing it has achieved profitability for the first time, electric car firm Tesla has continued to accelerate its expansion plans with the news it is to open a major new components factory at the Stanford Research Park in Palo Alto.

The company announced that it is to lease an approximately 350,000sq ft site that will supply all-electric powertrain solutions to Tesla and other carmakers. The new site is to be funded in part by the nearly $465m (£283m) in low-interest loans that the company secured recently from the US Department of Energy.

Highlighting the proximity to Stanford University and the historical significance of locating at the research park that has been the birthplace for a host of Silicon Valley success stories including HP and Facebook, Tesla said that it would move its official headquarters from San Carlos to the Palo Alto site later this year.

"Silicon Valley and the Stanford Research Park are synonymous with innovation and entrepreneurship," said Tesla chief executive and product architect Elon Musk. "It's an ideal place for a new car company trying to rethink many aspects of the traditional automotive business."

JB Straubel, Tesla's chief technology officer, added that the new facility and proximity to Stanford University would give the company "excellent access to top engineering talent" as it seeks to expand the site's workforce from 350 to about 650 staff.

The new plant also underlines Tesla's strategy of both developing its own electric cars and becoming a component supplier to other manufacturers.

It recently announced that it would provide battery packs and chargers to Daimler for use in its electric Smart car and the company confirmed yesterday that it expects to announce other powertrain deals in the coming months.

The firm is also reported to be finalising its decision on where to locate the $365m manufacturing plant for its proposed Model S all-electric sedan. To date the company has only confirmed that the new facility will be located in California.