Tesla needs a bigger factory. The electric carmaker’s Fremont, California plant was already “busting at the seams” last year to produce the luxury Model S and Model X SUV. Now with the company aiming this month for Model 3 production to reach 5,000 cars a week—and annual production to hit 500,000 cars—it’s in desperate need of manufacturing space.
Tesla $TSLA needs a bigger factory. The electric carmaker’s Fremont, California plant was already “busting at the seams” last year to produce the luxury Model S and Model X $TWTR SUV. Now with the company aiming this month for Model 3 production to reach 5,000 cars a week—and annual production to hit 500,000 cars—it’s in desperate need of manufacturing space.
The solution? A giant tent.
This timelapse imagery shows the tent coming together adjacent to the Fremont plant between May 27 and June 18:
Musk tweeted that the company used “scrap we had in warehouses” to help complete the facility in a matter of weeks.
Building permits pulled by BuildZoom show that Tesla applied to erect the structure valued at $2.8 million beginning in November 2017, including a “Tesla Sprung 3 Temporary Structure,” as well as foundations, sprinkler systems, and equipment installation. Musk seemed satisfied enough to declare that Tesla was better off than its conventional counterparts in an adjacent building costing hundreds of millions of dollars.
“Not sure we actually need a building,” he tweeted. “This tent is pretty sweet…It’s actually way better than the factory building.” Tesla’s newest acquisition, German automation company Grohmann, is now racing to finalize the company’s third general assembly line under the tent-like “sprung” structure (it appears to be constructed of aluminum and tensioned fabric). You can see reported ground-level images of the facility here.
This is not standard for the auto industry, to say the least, says Arthur Wheaton of Cornell University’s labor and industrial relations program. Automakers have built temporary structures in the past, usually to house excess inventory or to deal with emergencies. Ford $F once built temporary structures to shelter thousands of unfinished Explorer SUVs missing seats as supplier issues were worked out.
That’s of a different order than making use of a facility designed to be temporary to serve as a permanent installation housing tens of millions in sensitive machinery, computers and unfinished cars, Wheaton says. Weather or a natural disaster could spell disaster. “It’s a sign of desperation, but it could work out,” he says. “It seems appropriate that the P.T. Barnum of the auto industry puts production under the Big Top.”
Tesla has few options. With its Fremont plant at capacity, the company must invest in a new factory or find incremental capacity elsewhere. Wheaton estimates a factory making mass-market vehicles must operate at 80% capacity or more, churning about 200,000 vehicles per year to be profitable. Tesla wants to hit its target of 500,000 cars per year by the end of 2018, but that goal remains in doubt.
Investing in a new factory will take years and billions of dollars Tesla can’t afford until it gets it Model 3 production back on track.
It’s the tent or bust.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
