Remember back in 2008 when Tesla decided to move the production of its Model S electric car from New Mexico to California? Well, so does the developer that was going to build the facility — they’re suing Tesla for breach of contract and fraud.
Remember back in 2008 when electric car maker Tesla Motors changed its mind and decided to move the production of its Model S electric car from New Mexico to California? Well, so does the developer that was going to build a 150,000 square foot facility in New Mexico that was going to produce the Model S. The developer, Rio Real Estate Investment Opportunities, has now filed a law suit against Tesla for fraud, breach of contract, negligent misrepresentation and negotiating in bad faith, over Tesla’s decision to abandon the deal and is seeking damages and attorney fees.
The complaint, filed back in May (and embedded below), says that Tesla was going to lease a building that Rio Real Estate Investment Opportunities was going to build for $1.35 million per year for ten years, plus a 2 percent annual increase. The developer says it spent money on creating environmental reports, obtaining government approvals, and developing engineering designs for the site. Rio Real Estate says it entered into a binding development agreement with Tesla on February 19, 2007, and as a result of the lost deal, they’ve suffered financially.
Tesla denies the allegations and also sought to move the trial to federal court from New Mexico state court. I’ve reached out to Tesla for more details, but the company isn’t commenting at this point. The first hearing is on September 18, in Albuquerque.