Why would a car company want to operate out of Silicon Valley? For starters, consider that about 20% of a car's value is now comprised of electronic components, and this could reach 40% by 2015 - in true compliance with The Impact of Computing. This is already greater than the dollar value of steel or rubber in the typical car, and signifies the gradual shift of yet another technology into an information technology.
Silicon Valley's first car company, Tesla Motors, was founded in 2003. Their first product, the Tesla Roadster, was unveiled in July 2006, and is a fully electric $100,000 car that can accelerate from 0 to 60 mph in just 4 seconds. The cost of the electricity consumed is estimated to be as little as 1 cent per mile. Pre-ordered units will be delivered to customers in early 2008.
However, the initial Tesla Roadster is merely a symbolic product exercise for Tesla Motors. The real market-shaker is the subsequent 'White Star', a 4-door family sedan using the same electrical technology that could be released as early as 2009. It is expected to be priced at $50,000 to $70,000, and compete with BMW, Lexus, and Mercedes sedans. It is possible that by 2012-13, a 4-door sedan that reaches middle-class pricepoints could be available in substantial quantities, along with Tesla's service support infrastructure to go with it.
The benefits of a fully electric car that consumes just 1 cent of energy per mile are numerous, of course. From a decline in the quantity of oil imported from the Persian Gulf, to an increase in the purchasing power of the average American, to a contraction of the US Trade Deficit, to a reduction of atmospheric pollutants, there are many benefits to our society if this technology can scale into replacing a significant slice of US automobile sales by 2015.
Whether Tesla Motors succeeds in its long-term vision remains to be seen, but they have done well enough so far to merit watching closely.
Update (3/15/07) : Tesla is opening 5 dealerships across the United States. Go see one, if you are in the same areas.