Tesla Motors Leases New Facility In Central California Valley. But What For?

Californian electric automaker Tesla Motors might be undertaking a very public search across Nevada, Arizona, New Mexico and Texas for a suitable site for its proposed 1 million square foot, $5 billion lithium-ion ‘Gigafactory,’ but that doesn’t mean the Gigafactory site is the only land Tesla needs.

Despite planning the Gigafactory, Tesla still needs more manufacturing land.

Despite planning the Gigafactory, Tesla still needs more manufacturing land.

Some are being purchased, some are being leased.

Modifications underway

Take a former 431,000 square-foot facility just off Interstate 5 in Lathrop, California, which Tesla Motors [NASDAQ:TSLA] recently started leasing. An hour or so from the Fremont factory where it makes its world-famous Model S electric car, the facility was formerly used as a parts distribution warehouse for Daimler Chrysler for many years.

Following the disillusionment of the partnership between the two companies in 2007 however, the distribution facility was closed in 2009 when Chrysler moved its parts distribution centres to Portland and Los Angeles.

As various local news outlets report, Tesla has already acquired the necessary permits it needs to carry out “manufacturing modifications,” with work already started to craft the site to meet Tesla’s requirements.

What it isn’t

Speculation at the current time is high as to what exactly the site will be used for, and neither Tesla nor those working on the site are willing to give specifics.

What we can tell you however, is that the site certainly won’t be used for Tesla’s Gigafactory. At just 29 acres in size, the Lathrop facility is simply too small to engage in the kind of manufacturing required by the Gigafactory.

Tesla's Fremont facility is far bigger than any of the sites Tesla has recently signed leases on in CA.

Tesla’s Fremont facility is far bigger than any of the sites Tesla has recently signed leases on in CA.

Nor do we think the facility will be used to build complete cars. At the current time, Tesla’s Fremont facility is nowhere near full capacity, even with the recent addition of a second production line there.

What it could be

Like us, many sites have been trying to speculate what Tesla’s latest lease signing means for the company — and what it plans to do with the site.

As SFGate detailed yesterday, Tesla has been quietly acquiring leased sites in the California bay area for some time. In the past two months alone, it has signed leases on 625,000 square feet of California real estate.

In total, that’s still too small for any major vehicular manufacturing facilities, especially when you consider that Tesla’s main Fremont building is more than 5.5 million square feet in size.

But as InsideEvs noted yesterday, Job listings posted on Tesla’s own job site — nearly three dozen of them — hint what the site will be used for: CNC Machining.

Short for Computer Numerical Control, CNC Machining involves using computer controlled machinery to make intricate, custom-designed parts.

CNC Machining refers to any number of different industrial manufacturing processes, from CNC-controlled lathes and mills to plasma cutters and water-jet cutters.

The new leases are most likely to enable parts manufacturing for Tesla's new Model X -- due to enter production this year.

The new leases are most likely to enable parts manufacturing for Tesla’s new Model X — due to enter production this year.

In this case, we’d guess that the initial jobs posted on Tesla’s site are the first wave of employees, charged with setting up the Lathrop facility for the production of individual parts used to build future Tesla Models. It’s tough to say what those parts could be, but given Tesla already makes a large proportion of its Model S aluminium body components on-site in Fremont, we’d guess that the new facility will be charged with producing smaller-scale components for desecrate systems like steering, transmission or perhaps suspension, most likely for the soon-to-be launched Model X Crossover SUV.

Regardless of what the factory will produce however, we think this is yet more evidence that Tesla’s continuing expansion shows that it is serious about its goals of bringing electric cars to the masses in the next five years.


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  • Surya

    Since the current Fremont factory is MUCH bigger than they currently need, I wonder why they don’t use some of that space. I guess they don’t want to move all that equipment later on?

  • lad76

    If Tesla’s long range plans gel, they will need all the Fremont space for auto assembly to produce tens of thousands of model E cars. The Giga factory and the Fremont Plant point toward vertical integration of their production process. Perhaps they will also manufacture other key parts as part of this process. If they are fully vertically integrated, they will never be delayed by parts suppliers.

    • Electric Bill

      Correction… those will not be “Model E’s”, but “Model 3’s”.

  • Chris O

    When Tesla was trying to get Model S in production it had trouble finding suppliers since most believed the analysts mantra that Tesla would never amount to anything. The skeptics were proven wrong yet Tesla appears to stick to a very vertically integrated production model? I wonder why.

  • dollardragon

    lad76 you are warm…nnnThey are going totally vertical. First they will make the rest of the robots and other gear for Fremont. (That is why they aren’t using Fremont for this.) Then they will make all the tools for the Giggafactory. nnnBespoke manufacturing machines all at wholesale. It is another genius move by Musk & Co.

  • jeffsongster

    During the latest shareholder meeting the Lathrop facility was mentioned as a place where they are making cast parts. This would line up with the CNC milling ops as well as the cast parts can be trimmed and finished using CNCs.