Governor Celebrates Clean Technology Investment in California at Tesla Motors

SECRETARY BRADSHAW: Good morning. Thank you all for coming and thank you, Tesla, for hosting this. This is, we believe, a very exciting day and a very important day in California history. I have the distinct pleasure of introducing a man I've been working for, for five years. It's someone who has taught a lot of us that environmentally friendly, business friendly and worker friendly are not mutually exclusive terms. He's shown us that you can work towards a clean environment, which at the same time creates wonderful companies and fabulous jobs all at the same time. It's my distinct honor to introduce Arnold Schwarzenegger, Governor of the great state of California. (Applause)

GOVERNOR SCHWARZENEGGER: Well, thank you very much, Vickie, for the wonderful introduction. And, of course, Vickie Bradshaw is one of our great secretaries that has been actually also very instrumental in making all of this happen and why we are here today, so thank you very much. Let's give her a big hand again for the great work that she is doing. (Applause)

I also want to say thank you to Treasurer Bill Lockyer for being here today and having been a great partner in putting this deal together. Then Ze'ev Drori, I want to thank him -- he's the president and CEO -- for his great work; and Elon Musk, the chairman; and of course Steve Westly -- the former controller, who is also a board member here at Tesla, right? -- who has been very instrumental. So thank you all very much for having us here at Tesla. And I tell you, that I couldn't wait to come here and make this announcement.

Today we have two great announcements to make. One of them is -- let's start with the fires, because as you know, last week we had 1,000 fires all over the state of California. And thanks to the favorable weather and the hard work of our amazing and best firefighters in the world, they have helped us put the fires out as quickly as possible. And because of the help of the federal government -- we want to thank them also -- and the 41 other states that have come in and sent resources to California very quickly, manpower and so on, we were able to go from 68 percent of containment on Friday to 80 percent of the fires are now contained as of Sunday night. So this is really extraordinary work, even though there are still some houses and some structures and homes that are threatened by fires. But great work has been done over the weekend, so I want to thank everyone for their great help and their tremendous efforts.

Now, let's talk about the second good news -- and I know you're very excited about waiting for that one, huh? Good. I want to announce here today more great news for our economy and our environment here in California, because Tesla Motors is going to move their manufacturing to California.

Now, last year it looked like Tesla Motors would build its electric cars in New Mexico. Now, you have to understand, I myself bought one of the first Tesla cars and so for me to see this company build a manufacturing plant in New Mexico drove me absolutely insane. (Laughter) But, the fact of the matter is my good friend, Bill Richardson, offered better incentives than we could offer here in California and so, therefore, they were thinking about going with a plan through New Mexico.

But my administration, of course, does not like to lose. I'm very competitive and especially when it comes to something that is that important. After all, California is the leader in fighting greenhouse gas emissions and pushing alternative fuels and high-tech and all of those things, so I wasn't about to let the company that makes the world's sexiest and best high-performance electric car go to another state.

So, we left no stone unturned and we started going to work and thinking and thinking, what can we do, what other incentives can we offer? And then, luckily, we started working with Treasurer Bill Lockyer, who came up with some additional ideas of what we were thinking of. And so, this is why I want to give a lot of credit to Bill today, because he really was terrific. And it is one of those things, again, where you can see Democrats and Republicans can work together in this state, post-partisanship is in.

And we were sitting down and we came up with all kinds of great ideas for business incentives to attract companies like Tesla that make zero-emission vehicles here in California, because we both want these cutting edge companies not just to start here in California, do research and development in California, but actually manufacture here in California.

So we proposed a measure to waive the state sales tax on investments in manufacturing equipment for zero-emission cars built in our state. And the California Alternative Energy and Advanced Transportation Financing Authority adopted our proposal last week, which of course, made us very happy.

For Tesla, that means millions and millions of dollars in savings when they invest in building their new manufacturing plant in California. And on top of that, if they choose to go to a city where there is an Enterprise Zone, they will save additional millions of dollars. And on top of that, Tesla can also apply for funds from a new Alternative and Renewable Fuel and Vehicle Technology Program, which I signed last year, which is AB 118, sponsored by former Speaker Fabian Núñez.

When you add all of this up we were able to put together a better package and incentives than New Mexico. So we are very happy that Tesla decided to come back and to say I'll be back to California and they are back here again. (Applause)

After all, we are the state that passed the nation's first cap on greenhouse gas emissions, we are the world leader in clean and renewable power, we are the first place in the world to limit greenhouse gas emissions from cars and we are the first place in the world that has passed the Low Carbon Fuel Standards.

So technology like Tesla's will help us reduce our greenhouse gases and show the world how it is done. And I think that the only way we can reach our goals that we've set is companies like Tesla, that can help us. This is a deal that will help attract more companies now, like Tesla, to our state. We want other companies to come here if they produce cars that are run on fuel cell or hydrogen or hybrid or electric, all of them ought to come here to our state. So more clean technology and green technology businesses will locate here to California, more venture capital dollars will flow into California and more fantastic jobs will be created right here in California. You have heard me say so many times that we've got to protect the environment but also simultaneously protect the economy and I think this shows that we can do it.

So I want to say again to Tesla Motors, welcome back. California is thrilled to have you here; together I know we will do fantastic things. So thank you very much.

And now I would like to have Treasurer Bill Lockyer come up here and say also a few words. Thank you very much. (Applause)

TREASURER LOCKYER: Well, I'm the banker. The policy maker, the leader, of course the Governor and members of the Legislature, want to see California capture our share of the green-sector jobs and business opportunities. This is one, I hope, of many examples of where you're going to see California again in the forefront of creating this business expansion in our state and seeing the jobs -- in this instance about 400 white-collar and blue-collar jobs associated with the manufacturing facility -- in our state.

So I'm delighted to have been part of the team that helped figure out how to make these financial incentives work in a way that, for the short term, helps the company, long term helps California to have the revenues and the jobs and the payroll in our state. So we're delighted, I'm happy to be part of it.

And I want to ask the president and CEO of the company, Tesla Motors, to come up and say something, if you will, Ze'ev Drori. Zev? (Applause)

ZE'EV DRORI: What a day for Tesla, to host the Governor of California, the Treasurer and the Secretary of Labor. Welcome, all of you. We are really very, very pleased to have you here.

We at Tesla would like to thank, of course, the Governor, the Treasurer and the Secretary of Labor for their insightful leadership in recognizing the importance of nurturing clean tech industry in California. Silicon Valley is the incubator of the 20th century's most remarkable technology and the epicenter of new industry that improves the standard of living throughout the world.

It wouldn't be an overstatement to say that now Tesla is paving the way to a healthier world, with our commitment to zero-emission vehicles; a world with less carbon emissions, less greenhouse effect and its global warming, a world that has a viable alternative to the skyrocketing costs of fuel and its far-reaching economical and geopolitical consequences. Tesla has achieved what no other automobile company has. We are now delivering pure zero-emission vehicles to our customers.

Make no mistake, we are not a mere niche player with a car for the rich and famous. As the agreement with the state so clearly demonstrates, we are building a high-volume, zero-emission vehicle manufacturing in California for a mid-range family sedan and we are not going to stop there. We'll continue on and build even more affordable cars.

You are witnessing the debut of the new car company, a company unlike all others, a company with a (Inaudible) technology, a company dedicated to the exclusive production of zero-emission vehicles. Look around you, take a look at the young faces over there. Those are the people who really make it and we all have to thank them for their marvelous job and the commitment that they have shown to their product and the company and to California. Thank you very much. Thank you all. (Applause)

QUESTIONS/ANSWERS:

GOVERNOR:                                                             Well, if there are any questions about any of this, feel free. First of all, I just want to say I'm so happy when I go somewhere and we have a press conference or a meeting and I'm not the only one with an accent. (Laughter) It makes me very happy. Go ahead. Yes, please.

QUESTION:                                                               You said earlier that a person who would say that the drilling of oil would be blowing smoke. You've now recently endorsed Mr. McCain. Is he blowing smoke when he talks about drilling offshore?

GOVERNOR:                                                             Well, I think that it was maybe a little bit taken the wrong way, because I was saying that anyone, if you promise offshore drilling -- or any extra drilling or biofuels, or whatever someone says, or to tax oil companies, whatever it may be -- anyone that says that that will solve the problem and will lower the prices right now is blowing smoke.

So the point that I was making was more about there is no one that can do anything about the price right now except you. That was the point. You can make the difference, because you can have perfect tire pressure and that that will improve your mileage by four to five percent. You can go and get your car engine tuned; that will improve again by a certain percentage your performance. You can go and get a car that is a hybrid car or an electric car; that will have an immediate impact.

So you have the power to bring the costs of gas prices down, of what you pay, not any politician, no matter what they promise you. Because all of those ideas -- may they be good ideas or bad ideas, may they be ideas that I agree with or not agree with -- all of them will take years to have an effect. That was my point.

QUESTION:                                                               Governor?

GOVERNOR:                                                             Yes?

QUESTION:                                                               Given the continued hot and dry weather and the fact that firefighters are just now starting to get a handle on the various fires burning across the state, do you think you should reconsider your unwillingness to impose a statewide fireworks ban for the upcoming 4th of July holiday?

GOVERNOR:                                                             Well, the reason why I said that I want to recommend to the counties to ban fireworks is because each county knows their dangers. It would be wrong for me to do a statewide ban when in fact, when you do, for instance, fireworks on the beach, it is not dangerous, so why would you stop fireworks somewhere where it's not dangerous?

I think what we want to say is to the people, be careful when you go out and buy those fireworks. Maybe you shouldn't have any fireworks when you're in a dry area where there is forest and where there is brush and so on. It's too dangerous, because people say well, then we cannot raise all that money for these charitable organizations. But think about how much money do we raise for those charitable organizations compared to the damage that a fire that cause, the homes that they destroy? Like last year, 2,000 homes and structures and all this. That's so much more expensive.

So let's be a little bit less selfish about all of those things and let's just think about, for the better good of everybody. And so I just recommend everyone to be very cautious and those that live in dangerous areas not to buy any fireworks.

QUESTION:                                                               Governor, we've already seen this company starting to blaze new trails, but Detroit right now, the US domestic automakers, are struggling right now to reinvent themselves. Do you see your new policies attracting traditional U.S. automakers to come to California, especially as they try to export their vehicles to the Asian market?

GOVERNOR:                                                              I think that we will see big companies reaching out to small companies like Tesla to help them. I see that in the future. And I see also that Tesla is going to be an inspiration to all the big car manufacturers, that it is possible to make changes, that it is possible to produce alternative fuel vehicles.

And Tesla is such a perfect example, that here is a company that produces its first vehicle and it is all electric, 100 percent. And you step in it and it goes from 0 to 60 in 4.1 seconds -- 4. what? 3.9. Oh, you improved it? Okay, so it went from 4.1 to 3.9. But who is counting at that point? (Applause)

The point that I was going to make is that when I sat in the Tesla it jerked my head back when I stepped on the gas pedal, like a Turbo Porsche, but no sound. No sound, so there's no sound pollution, there is no pollution, no greenhouse gas emissions.

So they are going to be a great motivator. Are they going to solve the problems of the world? No. But they're going to have a tremendous power of inspiring the rest of the world to go in that direction, just like California with our greenhouse gas emissions. We know that we cannot alone solve the problem, but we can inspire other nations to go in the same direction and that's what we want to do. Other car companies to go in the same direction, other sates to go in the same direction with their regulations and other countries to go in the same direction. We are going to be an inspiration and push the country and push the world in the right direction.

QUESTION:                                                               Governor, as you may know, a report came out this morning -- a little off subject here -- which indicated that the death penalty system in California is in a shambles. My question for you is, what needs to be done to get the death penalty system, in your opinion, back on track, if indeed it should be?

GOVERNOR:                                                             Well, I think that we have to continue working with everyone, both parties have to work together and all the stakeholders and the people that are for and against it and everyone has to come together. I think we're going to move it forward. You will see that we will have it back in place in no time. As you know, I'm a big believer in the death penalty and so we're going to do everything we can to move it forward. Okay? Thanks very much.

QUESTION:                                                               One last question. How long is it going to take (Inaudible) how much is it going to cost (Inaudible)

GOVERNOR:                                                             We have an expert here that can answer that question. He will do a good job with that.

ELON MUSK:                                                           All right. Well, I'd like to just emphasize something that Ze'ev mentioned earlier, which is that the goal of Tesla really is to produce mass-market cars. This is not about -- the company is not out to solve a sports car shortage in the world. The reason we have an expensive car initially is because the technology is expensive; it takes time to optimize. If we could do a low-cost car right off the bat we would have done it. But with Model 2, the sedan, as we've talked about publicly, that will be a $60,000 car and that's before any tax credits or other incentives are counted. And we have some projects in the works that could actually deliver an electric car, a pure electric car, for under $30,000, maybe a lot sooner than anyone thinks. So I think --

QUESTION:                                                               How long is that, is it years?

ELON MUSK:                                                           No, no. Actually, it's probably four years at the most. Thank you.

GOVERNOR:                                                              I use many times the analogy, which is like the cell phones.

ELON MUSK:                                                           Exactly.

GOVERNOR:                                                             I remember that when I bought 20 years ago a cell phone, it would cost $1,600. Then it went to $1,000, then to $500 and now you get them for free. (Laughter) I'm not saying that you eventually will get cars from Tesla for free, but what I am saying is that the costs will come down because more and more people are going to buy it, there will be more demand, they will manufacture more and that will bring the price down. That's the bottom line.

So thank you very much, all, for being here today. And again, a huge hand for Tesla for doing such an extraordinary job. (Applause)