After taking delivery of our Nissan Leaf last week, I had a chance to tour the Tesla electric-car facility in Palo Alto, California, and get a close look at work being done on the Tesla Model S, a luxury sedan due out next year. Tesla has established itself as a maker of premium electric cars with the Roadster, essentially a $110,000 Lotus Elise conversion. The Roadster will be phased out soon, at which time the Model S, sized and priced in BMW 5 Series or Mercedes-Benz E-Class territory, will enter the market. (Read our Tesla Roadster first drive.)

The Tesla facility is located in the midst of green rolling hills and horse stables, just minutes away from Stanford University. The first floor is a grease-free workshop where the Roadster's battery cells are assembled into their packs and coupled to the small transmission. The second floor is a large open office area. A workshop dedicated solely to the Model S features neatly arranged suspension components, body shells, and interior mockups. Several Alpha-stage prototypes were present, including a couple of orange body shells destined for crash tests. The intricate multi-link rear suspension that sits inside a sub-frame is something to behold. The double-wishbone front suspension is impressively machined, and the front axle looks like it has enough room to accommodate an extra motor, should all-wheel drive be added someday.

Peter Rawlinson, a Tesla vice president and chief engineer, explained the nitty-gritty behind the car: "We want a car that's appreciated by the driving connoisseur, yet isn't off-putting for the non-enthusiast." When I raise the concern over electric power steering typically not boding well for such a mission statement, Rawlinson reassured me: "Being a former Lotus engineer, I'm nuts for steering feel." He went on to explain that the body shell is extremely stiff despite the large rear hatch.

The battery pack is large and flat as a pancake—no more than two inches thick and spans the entire floor of the car within the wheelbase. According to Tesla engineers, that battery pack acts as a structural enhancement. "Given that the body is made out of aluminum and the fact that the car has no conventional running gear allowed to us to achieve great handling and a very supple ride," Rawlinson said with pride. He explained that the inherent lack of body roll allowed the team to use very thin anti-roll bars, thus not compromising ride comfort. Soft rubber bushings that reduce road noise and improve isolation were also used. At this early stage, though, I wasn't able to put these claims to the test.

At 200 inches long, the S is a large car, but its low stance and 21-inch wheels make it look smaller. Base models will have 19-incher wheels. In overall size, the S actually slots between a BMW 5 and 7 Series. Being a hatchback, it's reminiscent of the Porsche Panamera. But unlike the four-seat Panamera, the S will actually be a 5+2, with the +2 being a small rear-facing third-row seat that folds into the floor. The dash will have a large 17-inch touch screen to interface with the audio, climate, and navigation systems. Needless to say, I expressed my hope that it will be a better execution than MyFord Touch.

The Model S will be available with three different range capabilities: 160, 230 and 300 miles. The battery is switchable, but not for the purpose of hot-swaps as envisioned by Better Place. "We are loathe to lend our batteries to anyone" said Ricardo Reyes, VP of communications. The battery change-out lets a customer upgrade from a 230-mile range battery to a 300-mile one. The Model S will start production in early 2012 in the same Fremont, CA, plant formerly owned by the Toyota/GM joint venture that produced the Toyota Matrix and Pontiac Vibe. Tesla is taking online orders for the Model S already, well ahead of its summer 2012 on-sale date.

The Model S is where Tesla's future lies. It plans on offering additional body styles on the same basic platform, one such derivative will be the Model X crossover. Clearly, the Roadster was only the opening shot. The Model S will determine the company's long-term viability.

See the Telsa Model S in our New Car Preview.