DOWNEY — U.S. Secretary of Energy Steven Chu announced this week that his department has closed its $465 million loan with Tesla Motors for construction of a manufacturing facility in Southern California on the Model S electric sedan and a power-train manufacturing facility in Palo Alto.

The Model S site is the 80-acre Downey Movie Studio, 12224 Lakewood Blvd. in Downey, according to Rep. Lucille Roybal-Allard, D-Los Angeles.

“I commend Secretary of Energy Steven Chu for finalizing this loan agreement that was necessary to make the company’s plans to operate a Downey plant a reality,” Roybal-Allard said.

“The loan from the Department of Energy is also a strong demonstration of the administration’s commitment to create jobs that also protect our environment. Toward that end, I am confident Tesla’s commitment to build its new Model S environmentally friendly electric sedan at the former NASA shuttle manufacturing site is one that will pay big dividends for Tesla, Downey and the entire region,” she said.

Although Tesla has not made a formal announcement on the Downey site, it has submitted an application to the city seeking to use part of the 80-acre Downey Movie Studios complex as a manufacturing plant, according to Scott Pomrehn, assistant deputy city manager.

The application was filed Jan. 15 by officials from Tesla and the Industrial Realty Group, owners of about 60 acres of the site. The city of Downey owns the other 20 but had previously agreed with IRG to allow use of that land as part of the manufacturing site.

The application, now under review by the Planning Department, confirms that Tesla has chosen the Downey site for the plant, expected to provide about 1,200 jobs when it begins production, city officials said.

The Palo Alto facility will assemble electric vehicle battery packs, electric motors, and related electric vehicle control equipment, both for Tesla’s own electric vehicles and for sale to other manufacturers, Chu said.

The agreement was negotiated and signed by the Department’s Loan Programs Office, which supports the development of innovative, advanced vehicle technologies to create thousands of clean energy jobs while helping reduce the nation’s dependence on foreign oil.

“This is an investment in our clean energy future that will create jobs and reduce our dependence on foreign oil,” Chu said. “It will help build a customer base and begin laying the foundation for American leadership in the growing electric vehicles industry. This is part of a sustained effort to develop and commercialize technologies that will be broadly deployed throughout the American auto industry.”

Tesla’s planned Model S will consume no gasoline and will not produce any tailpipe emissions. It is being designed to offer a variety of range options depending on the battery pack used, from 160 to 300 miles on a single charge.
Volume production of the Model S is planned to begin in 2012 with a target production capacity of 20,000 vehicles per year by the end of 2013. According to Tesla, the Model S project and power-train manufacturing facility are expected to create more than 1,600 jobs.

The city of Downey actively recruited the Tesla plant, winning out over Long Beach.

Tesla Motors is headed by Elon Musk and based at his Space X plant, 1 Rocket Road, in Hawthorne.

The company, with a showroom in West Los Angeles, currently manufactures high-end electric cars. The Model S would be aimed at the average family, Pomrehn said.

Musk is also the chief executive officer for the SpaceX Company, which received a contract from NASA in December 2008 that is potentially worth $3.1 billion to produce rockets to lift supplies to the International Space Station.