Tesla Proposes Doubling Fremont Plant to Meet Capacity

Tesla Motors has filed for a zoning proposal allowing the automaker to double in size its California factory to meet a 500,000 vehicle annual production goal.

Tesla submitted a long-term zoning proposal that was released in a government document, as reported by The Wall Street Journal. The manufacturing plant, based in Fremont, Calif., dates back to the 1960s.

“We are pleased to work with the City of Fremont on a plan that reaffirms our commitment to California and to eventually maximize the potential of our Fremont factory site,” Tesla said in a statement. “California continues to be the epicenter of Tesla’s manufacturing capabilities and we are proud to be the state’s largest manufacturing employer.”

Tesla needs to expand its facility as one part of meeting chief executive Elon Musk’s target of producing a million vehicles a year by the end of 2020. About 50,000 vehicles were built at the Fremont plant last year.

Musk expects demand for the upcoming Model 3 to meet the goal of producing 500,000 vehicles a year from 2018 to 2020. Earlier this year, the company said that about 373,000 pre-orders of the Model 3 had been placed.

“Tesla is going to be hellbent on becoming the best manufacturer on earth,” Musk said in May, when he announced the new target.

Tesla hasn’t released a plan to expand the Fremont plant, or a timeline for doing so. The zoning proposal does suggest that Tesla is moving to boost production capacity.

When Musk set the one million vehicle production goal in May, he acknowledged that the company might not reach that scale – and that another vehicle manufacturing plant beyond Fremont would be needed. The company has been considering opening plants in Europe and China, he said.

“Whether that’s actually wise is a separate question,” he said. “For our future product lineup, we’re going to need more than one plant in North America just to satisfy North America demand.”

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Tesla’s zoning proposal would guide development of the property for the next decade or more. The complex that covers about 4.5 million square feet would double by about 4.6 million square feet. Production could increase up to 500,000 vehicles a year, which means that employees would go from the present number of 6,210 up to 9,315, according to city records.

The electric automaker has purchased an additional 25 acres next to the property, according to Tesla.

The Fremont Planning Commission is expected to review the plan on Thursday.

The Fremont plant has been an historic site for the auto industry. General Motors started up the assembly line in the 1060s. By the 1980s, the company was hit hard by competition from imports of Asian cars and agreed to partner with Toyota to share the costs. The joint venture, called New United Motor Manufacturing Inc., or NUMMI, was in operation until GM’s bankruptcy in 2009 and Toyota’s decision to close the plant in 2010. Tesla acquired the NUMMI plant a few months later.

Wall Street Journal