Tesla Fremont Factory
The Tesla Fremont Factory is an automobile manufacturing plant in Fremont, California, United States, operated by Tesla, Inc. The factory originally opened as General Motors' Fremont Assembly in 1962, and then was operated by New United Motor Manufacturing, Inc., a joint venture of GM and Toyota from 1984. The joint venture ended when GM entered bankruptcy in 2009. In 2010, Toyota agreed to sell the plant to Tesla at a significant discount. The plant is the only production site for the Model S and Model X and also produces the Model 3, and Model Y.
In 2023, the Fremont Factory produced nearly 560,000 vehicles and employed over 20,000 people. Tesla says the factory has the capacity to produce up to 100,000 Model S and X vehicles and 550,000 Model 3 and Y vehicles annually.
Background
Tesla had planned to build a factory in Albuquerque, New Mexico, a central location for shipping. Construction was supposed to begin in April 2007, but was canceled. The company later announced a greenfield factory would be built in nearby San Jose, California. However, the cost of both projects was prohibitive, and the company looked for alternatives.An opportunity presented itself in 2010 when Toyota was looking to sell the NUMMI plant in Fremont. NUMMI had been operated as a joint venture between Toyota and General Motors from 1984 until GM filed for bankruptcy in 2009. NUMMI yearly production peaked at 428,633 vehicles in 2006. Prior to NUMMI, the facility was the GM Fremont Assembly from 1962 to 1982. Efforts were made in 2009 to keep the facility in use: the state offered incentives to Toyota, other automakers including Tesla toured the facility, and a stadium was considered, but none of them succeeded. In 2010 the mayor of Fremont viewed the site as dead.
During its 2009 tour, Tesla initially dismissed the NUMMI site for being too big and costly for the then fledgling automaker. However, the company was able to reach a deal with Toyota to pay $42 million for most of the site, significantly under market value. As part of the agreement, Toyota would also purchase $50 million of common stock when Tesla held its IPO the next month. In exchange, Tesla agreed to partner with Toyota on the "development of electric vehicles, parts, and production system and engineering support." Under the agreement, Tesla would go on to create the electric powertrain for the second-generation Toyota RAV4 EV. The two companies would later end their partnership in 2017.
On April 1, 2010, NUMMI produced its last car. All of the factory equipment was sold off equipment at an auction, with robots and tooling being purchased by Toyota's plants in Kentucky, Texas and Mississippi. NUMMI sold some equipment to Tesla for $15 million, a significant discount compared to new equipment.
Tesla officially took possession of the site on October 19, 2010, and started work inside on October 27. The state of California awarded Tesla $15 million in tax credits if employment and investment goals were met. The first retail delivery of the Tesla Model S took place during a special event at the factory on June 22, 2012.
Facilities
The plant is located in the South Fremont District next to the Mud Slough between the Warm Springs BART station and the California State Route 262 connecting Interstate 880 and Interstate 680.Tesla only purchased 210 of the 370 acres owned by NUMMI. When Tesla first moved into the plant, it was about 10 times the size the company needed and much of the activity at the site was concentrated inside the main final assembly building.
In addition to the equipment Tesla purchased from NUMMI, the company also purchased a Schuler hydraulic stamping press from a Detroit-based auto industry supplier, worth $50 million new, for $6 million, including shipping costs.
Various parts of the NUMMI plant were planned to be modified to support Tesla vehicle production. For example, the passenger vehicle paint equipment was to be extensively modified through late 2011; converted from solvents to BASF water-based paint. Two paint lines were constructed from 2015. By 2014, half of the factory area was in use.
The floors, walls and ceiling are painted white with skylights and high-efficiency lighting to create an environment similar to a laboratory, and the production environment is cleaner and quieter than at NUMMI.
Union Pacific Railroad had tracks running into the plant which had been used during NUMMI-era to carry finished cars. All rail connections were subsequently removed, with the sidings used for more factory facilities. In July 2013, Tesla acquired an adjacent 35-acre property from Union Pacific Railroad for a test track.
Tesla built a casting foundry in Lathrop in 2015 supporting the Fremont production, and leased 1.3 million sq ft of warehouses in nearby Livermore in 2017.
In 2016, there were 4,500 parking spaces, and Tesla purchased a neighboring 25-acre site from Lennar. In August 2017, Tesla won approval from the Fremont City Council to double the size of the facility with about 4.6 million new square feet of space. Tesla also planned to expand production capacity five-fold to 500,000 vehicles per year by 2018, or 10,000 units per week.
As of early 2019, the facility has of floor space.
Employees
Tesla started production with 1,000 workers. By 2013, this had risen to 3,000, and to 6,000 people in June 2016. In 2016, preparing for Model 3 production, Tesla planned to increase their work force to about 9,000 people. In fall of 2017, Tesla employed some 10,000 at the Fremont plant, a number still being shared in June 2018., the factory employed about 22,000 people.In addition to Tesla employees, the company uses contractors for various functions. In May 2018, Elon Musk, in an apparent goal of reducing dead weight and raising efficiency and quality within its operation, decided to cut contractors and sub-contractors, ordering staff to justify and personally vouch for contractors worth keeping.
Production
When Tesla purchased the Fremont Factory, it was preparing to build the Tesla Model S, a full-sized luxury sedan. Previously the company had assembled its Roadster in an old Chevrolet dealership in Menlo Park. However the Roadster bodies came to California as gliders after being built by Lotus Cars in England.To learn the skills necessary to create vehicles from scratch, in 2010, Tesla started hand-assembly of 20 Model S vehicles at its "alpha workshop" inside its Palo Alto headquarters building. In 2011, Tesla transitioned to 50 "beta builds", production-validation vehicles built entirely at the Fremont Factory. These cars would also be used for system integration, engineering testing, and federal crash-testing and certification. Tesla expected to produce about 5,000 Model S sedans in 2012, and 20,000 in 2013 if necessary. The first retail delivery of the Model S took place during a special event held at the Tesla Factory on June 22, 2012. Production increased from 15 to 20 cars per week in August 2012 to over 200 by November 5 and 400 by late December. In late December Tesla revised their 2012 delivery projections down to 2,500 cars.
Deliveries reached 6,892 units in the last three months of 2013. In December 2013, California announced it would give Tesla a US$34.7 million tax break to expand production by an estimated 35,000 vehicles annually from its Fremont, California plant.
Tesla announced that weekly production was expected to increase from 600 cars in early 2014 to about 1,000 by year-end. Tesla produced 7,535 units during the first quarter of 2014 and expected to produce 8,500 to 9,000 cars in the second quarter of 2014. As of early May 2014, the production rate was 700 cars per week.
, about 1,000 cars were made per week, mostly to pre-orders. Musk says they averaged around 20 changes to the S per week.
Production of the Model X started during 2015, following a short reconfiguration of the production line in July 2014. The first Model X that didn't need corrections was made in April 2016. Tesla moved some of the equipment to their Tilburg final assembly plant in the Netherlands in 2015.
On July 2, 2015, Tesla announced that it had delivered a total of 21,537 vehicles in the first half of the year. All vehicles were manufactured at the Fremont plant.
In May 2016 Tesla raised $1.46 billion in stock, of which $1.26 billion is to prepare production of the Model 3 scheduled for late 2017. Changing from serially producing the Model S and X to the mass production of Model 3 is viewed by experts as a significant step. Tesla stated in May 2016 that it does not have that capability and needs to acquire it, which it partly did with the acquisition of Grohmann Automation in 2016 and purchase of mass production equipment. Whereas the Roadster was delayed by 9 months, the Model S more than six months, and the Model X more than 18 months, analysts estimated in December 2016 that the Model 3 production preparation was on schedule for the second half of 2017.
On August 3, 2016, Tesla announced that it was consistently producing 2,000 vehicles per week. About 2,500 workers operate in the day shift and 2,000 on the night shift.
Tesla makes many parts itself, which is unusual in the auto business. Tesla also works with 300 suppliers around the world, of which 50 are in Northern California, and 10 in the San Francisco Bay Area. Tesla's dashboard supplier SAS rents a 142,188-square-foot building near the factory, beginning in January 2017 with 200 employees. Other suppliers that have opened facilities in the area to be close to Tesla include Eclipse Automation and Futuris Automotive Group. Tesla produces many of its seats at its own seat factory a few miles south of the main factory.
In 2020, due to the COVID-19 pandemic, Tesla implemented virus mitigation efforts in its Shanghai and Fremont factories. Shanghai resumed production on February 10, while the Fremont and New York factories were to reduce activity by March 24. On May 9, Tesla sued Alameda County in order to force the reopening of the Fremont Factory. Tesla told its employees that it had received approval to restart production in the week beginning May 18, and the lawsuit was dropped on May 20.
As other factories reduced production during the COVID pandemic, the Fremont factory became the plant with the highest weekly production in North America at the end of 2021. Elon Musk announced at the 2021 Shareholder Meeting, October 7, 2021, that Tesla hoped to increase the production capacity at the Fremont Factory by 50% in the next couple of years.