Tesla Leases a New Plant: Is Expansion Around the Corner?

Tesla Model S, photographed in Switzerland by James Lipman // jameslipman.com

It’s a well known fact in automotive circles now that Tesla Motors has been constrained on a capacity level, rather than a demand one, since its facility in Fremont, California, can only churn out so many vehicles at a time, despite having the most advanced manufacturing equipment available.

It’s this issue that has been holding Tesla back from its plans to rapidly expand in numerous global markets. While people are bickering about how much the Model S costs, writing it off as a toy for the rich, the demand continues to defy critics of the company as customers snap up the units as fast as Tesla can build them.

However, new reports that Tesla has secured a lease on an idled parts-distribution facility in rural California and is hiring workers to staff it (there are about thirty-two open positions at the new location) indicate that the company is making progress on helping alleviate its waiting list. Tesla didn’t reveal, however, what its plans for the 431,000-square-foot  facility were going to be, Bloomberg said. 

“They’ve pulled building permits for building modifications and I believe some sort of manufacturing equipment is being installed,” Steve Salvatore, city manager of Lathrop, California, said to the publication. He didn’t reveal any further details.

source: http://www.flickr.com/photos/jurvetson/

The plant was formerly a parts-distribution center used by Chrysler’s performance-brand Mopar unit. “Tesla is continuing to invest and create jobs in California as part of our ongoing infrastructure expansion,” the company said in an e-mailed statement. The company is also still considering a location for its gigafactory, a $5 billion facility that Tesla will use to produce lithium-ion battery cells for its vehicles.

“In the last two months, we have signed leases for more than 625,000 square feet of Californian real estate, independent of sales and service centers,” Bloomberg quoted Tesla as saying. “These recent investments reinforce our commitment to California and will help us continue to bring compelling electric vehicles to market at affordable prices.”

The news comes as Tesla begins its first deliveries to China, after a buildup of seven or so months. Tesla believes that by the end of next year, demand for its Model S sedan will be equal or greater to the demand seen here in the States. The company sold a little more than 22,000 vehicles last year.