Electric carmaker Tesla to open D.C. store

A luxury car dealership and service station is on its way to downtown Washington, but don't expect to get your oil changed there.

Luxury electric carmaker Tesla Motors is nearing a deal to lease space for its first D.C. store on K Street, in what would add to the Washington area's status as a testing ground for the nascent electric car industry.

Founded in 2003, Palo Alto, Calif.-based Tesla raised more than $200 million at its initial public offering in June. Its sporty, battery-powered cars, of which it has sold about 1,200 worldwide, can be plugged into most electrical outlets, charged overnight and driven 245 miles without needing a recharge.

Tesla spokesman Ricardo Reyes confirmed that the company is nearing a deal to bring a Tesla store to 1050 K St. NW, a downtown office building owned by the Lenkin Co. and the Tower Cos. The company already sells cars through stores in New York, Chicago, Seattle, Boulder, Colo., outside Fort Lauderdale, Fla., and in Menlo Park and Santa Monica, Calif.

"Although no lease has been signed, this is a site we're considering," Reyes said.

He said the car a Tesla buyer is most likely to be replacing is "a hybrid or like a Porsche 911 Turbo," probably because Teslas can travel from zero to 60 miles per hour in 3.7 seconds. With a base price of $109,000, the area's high incomes don't hurt either. "You have all those things in D.C.," he said.

Tesla acts more like a technology company than a traditional automaker. Its strategy, Reyes said, is to "supply a premium vehicle for kind of early adopters and take everything you learn from that premium vehicle and use it to build ever-more-affordable electric cars."

"The approach we took is a very different approach from what a typical car manufacturer would do," he said. One example is Tesla's plan to sell its car like Apple sells computers; the carmaker owns and operates its own stores as the tech giant does, rather than contracting with independent dealers, and services cars itself. In July, Tesla announced the hiring of a former Apple executive to be the company's vice president of design and store development.

Though established automakers have yet to begin selling their own electric cars en masse, Washington is already shaping up as a competitive sales market. The area is one of more than a dozen American markets where Nissan has formed partnerships aimed at unveiling its electric Leaf car this year and is also one of the early markets in which General Motors will make its electric Chevy Volt available. Both are expected to sell for less than half what a Tesla does.

D.C. already has 13,900 registered electric hybrids and had the fourth-highest sales nationwide for such vehicles in 2008, according to a report by Travelers and the Polk Center for Automotive Sales.

City officials hope Tesla's arrival on K Street will also enliven downtown retail. D.C. Deputy Mayor Valerie Santos said in an e-mail that the company has "a very Park Avenue, high-end feel" and that its entrance shows that D.C. "bucks the trend on the decline of retail options in other metropolitan cities."

To make way for the company, she and other city officials have been examining zoning rules and other regulations that could bar an auto dealership from operating downtown. The city's zoning administrator "has done an initial review of the company's plans and it would be allowed as presented," said Michael Rupert, a spokesman for the D.C. Department of Consumer and Regulatory Affairs.