Tesla Motors has a secret. The California automaker has leased, and is now renovating, a 431,000-square foot former Daimler-Chrysler distribution facility in Lathrop, CA, but is not saying exactly what it will be using the space for. At least, not yet.

Interior shot of Tesla's new leased space in Lathrop, CA.About an hour's drive east from its Fremont, CA factory, the property is located just off the north-to-south Interstate 5 (I-5) and has extra acreage to expand the building by another 124,980 sq-ft, if needed. Designed to handle a lot of shipping in and out, one side of the structure is gifted with 32 truck docking bays.

With no official word on the type of activities that are planned for the facility, it is only natural that we would want to speculate a bit. There is one clue out there that can aid our hypothesizing. The job section of the company's website lists a number of openings that would indicate manufacturing of some sort is intended for the space.

We'll go ahead and rule out serial vehicle production, since the Fremont space still has ample room for that activity to handle the upcoming Model X and the more affordable future vehicle. It's far too small to be a battery gigafactory, so could it be instead a kilofactory ? Probably not. Of course, it could just be a new site for producing components for the Fremont production lines, but that doesn't sound nearly as exciting. It also doesn't seem to be worthy of secrecy. The coolest – though not necessarily most accurate – thing we can come up with is a skunkworks. A secret lair where new concepts are conceived and developed away from the prying eyes of the public. Yeah, we'll go with that.

When we contacted Tesla for clues about the facility's purpose we got a boilerplate response, though interestingly, they might have thrown us another mysterious bone in the process. And we quote, "Tesla is continuing to invest and create jobs in California as part of our ongoing infrastructure expansion. 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. These recent investments reinforce our commitment to California and will help us continue to bring compelling electric vehicles to market at affordable prices."

With a 194,00-sq ft discrepancy between the known Lathrop acquisition and the numbers given by the automaker, it seems that may be yet another decent-sized unknown building in the mix. It's all enough to boggle our easily-beboggled minds so, to paraphrase a certain Tom Waits, we ask you, dear reader, what's he building in there?


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  • 39 Comments
      Jim_NJ
      • 7 Months Ago
      My bet is that this for the new Titanium and aluminum "armour" for underneath the Model S (and probably Model X). Tesla needs to get over 20,000 of these for existing Model S's, plus 2500+ per month. I suspect that the Tesla Fremont factory doesn't have the manufacturing facilities, and the labor will be cheaper in the central valley. But that's not to say that Tesla couldn't use this facility for some prototyping of new models as well.
        Rotation
        • 7 Months Ago
        @Jim_NJ
        Tesla only uses a small fraction (like 15%) of the current Fremont factory. They are not out of space. That plant used to build more than 300,000 cars a year. They aren't hurting for space from their 20K production.
          Jim_NJ
          • 7 Months Ago
          @Rotation
          I wanted to see if anyone else was thinking like me, and I found it on Teslamotorsclub.com. I like AustinEV's analysis from Teslamotorsclub.com: So consider the challenge. You are responsible for making or buying 20k titanium alloy pieces, then a run rate matching the run rate of the cars thereafter. You need CNC machining, but the Fremont facility as (some, none, little) cnc capacity, but it is all being used for their regular output. You have made it your job to know about various mothballed factories in the area, possibly because (as I joked earlier) people keep calling you to offer them up. So you knew that there was a facility that used to do lots of CNC stuff, and you confirm that there is some older equipment in there, not cutting edge but fine for these shields. So you lease the facility, hire up some staff to make the "bubble" of parts required while possibly gearing up a much smaller capacity at fremont for the long term. So they need 30 machines for the short term and 3 machines long term. Rent 30 for a while and buy 3 in fremont. Build up the plates for the existing fleet and let the lathrop facility go, bringing over the new employees.
      • 7 Months Ago
      A few months ago I noticed that the Rimac website has a picture of a Concept One parked beside the Rocky Creek Bridge on the Big Sur Coast. I don't believe that Croatian electric supercar is in the home of Tesla by accident. We will see.
        Grendal
        • 7 Months Ago
        Rimac comments on TMC quite a bit. I think Tesla would be smart to get this guy on the team as long as he is okay with not being the boss and working in a team environment.
          JP
          • 7 Months Ago
          @Grendal
          I don't see it. Rimac is using different technology, (PM motors and LiFePO4 chemistry), building a different vehicle, and targeting a different customer. I don't see what they have to offer each other at this point in time.
      purrpullberra
      • 7 Months Ago
      Very interesting. I wonder if one facility is for starting to figure out the battery making process ahead of the gigafactory itself. I don't quite see why a parts or distribution warehouse couldn't be in Fremont. I think it has to be something completely apart from the car making part of the business. Experimentation sounds like as good a guess as I can think of right now.
      Robert Fahey
      • 7 Months Ago
      Lotus submarine project.
      Grendal
      • 7 Months Ago
      It's a staging area. Or, Tesla intends to move certain manufacturing processes to that facility to expedite rolling out more cars. The outside idea would be that Tesla fails to find proper partners for the Giga-factory and opens just a super battery factory instead. They did get $2 billion for the project and that's a darn big facility and Tesla can go it on their own as long as Panasonic allows them to use the battery tech.
      • 7 Months Ago
      ELon hinted at building static battery packs for smart grid use (i.e. storing energy from intermittent renewable sources (ex. wind or solar) during peak production times and provide to the grid during peak usage times).
        gpmp
        • 7 Months Ago
        This is the best explanation so for. Solar city sells/leases the batteries manufactured by Tesla. Makes me wonder where the batteries Solar City has installed to date were manufactured. They have a residential program: http://www.solarcity.com/residential/energy-storage.aspx and bigger plans for commercial installations: http://www.solarcity.com/commercial/demandlogic/
      Robert Fahey
      • 7 Months Ago
      Lotus submarine project.
      purrpullberra
      • 7 Months Ago
      How about the news that Tesla is going to build TWO GIGAFACTORIES just to ensure that one is ready on time !?! That is pure Musk: Audacious, almost reckless, challenging of the status quo. "We will end up spending more money than would otherwise be the case to minimize the timing risk" is the exact quote. Wow! There is no way they are going to outfit both with wind and solar and filled with machinery, right? Or do they use both and just use a small % of capacity both places? This is a wild development! Come on AB/ABG we want to talk about it!
      BipDBo
      • 7 Months Ago
      Here's my speculation: They lease a building in "secret" but let it slip that they're doing it. They don't tell us what it's for so people speculate, get really excited, and the stock goes through the roof. Tesla makes far more money in the stock jump than the cost of building lease. Elon Musk occasionally visits the building, and makes sure to walk in with a suspicious demeanor all while the paparazzi snaps and journalists and fanboys everywhere continue to speculate. Inside, he just plays street hockey on roller blades with his kids, with plenty of room in the a huge, empty building that is doing nothing except for making him lots of money. It's good to be Elon.
      • 7 Months Ago
      Make more of his own components for all his future vehicles, so he can control quality and possibly lower cost?
      BipDBo
      • 7 Months Ago
      Here's my speculation: They lease a building in "secret" but let it slip that they're doing it. They don't tell us what it's for so people speculate, get really excited, and the stock goes through the roof. Tesla makes far more money in the stock jump than the cost of building lease. Elon Musk occasionally visits the building, and makes sure to walk in with a suspicious demeanor all while the paparazzi snaps and journalists and fanboys everywhere continue to speculate. Inside, he just plays street hockey on roller blades with his kids, with plenty of room in the a huge, empty building that is doing nothing except for making him lots of money. It's good to be Elon.
        Grendal
        • 7 Months Ago
        @BipDBo
        Uh, nope.
        BipDBo
        • 7 Months Ago
        @BipDBo
        Wow. 4 times. That's a record for me.
        purrpullberra
        • 7 Months Ago
        @BipDBo
        Wow. What an extreme example of uneducated cynicism resulting in a childish and outlandish accusation. Tesla doesn't 'make money' by just selling some of its stock. Tesla selling stock to pay rent on empty factories is an idea that could only be conjured in the mind of an idiot. It sounds like something the 9 year old would say when he asks questions while scooping my dogs poop each weekend.
          purrpullberra
          • 7 Months Ago
          @purrpullberra
          They don't make money selling off stock randomly. They raised money by great offerings of stock to the market. They don't just sell some now and then to raise money for operations. There is a huge difference. That is the idiocy I was referring to. I'm bad at using and recognizing sarcasm sometimes.
          Grendal
          • 7 Months Ago
          @purrpullberra
          While very true that Tesla has been riding their popularity to position themselves much better financially. They are still building a great product to back up that popularity. Some of the money comes from very smart business moves (ZEV credit sales), and a whole lot from investment loans. I would phrase it that Tesla is leveraged to the hilt based on pursuing their future plans. If they successfully pull off each of those steps then the money should easily be there to pay off each of those loans. Most of this comes from the fact that Tesla is a very young company for the ambitious and expensive projects they have taken on. We're talking about $3 billion in loans and that isn't really a lot of money based on the fact they are selling $100K (average sale) cars. The gross profit in one year is heading toward $1 billion now that Tesla has achieved a 25% gross profit margin. Tesla is not, and probably will not, be chasing large net profit numbers for many years to come. They are building their infrastructure and spending a whole lot to do it at a breakneck pace. The bottom line is that I don't see Tesla doing anything too stupid so far in growing as fast as they are. As long as the product (the cars) maintains their exceptional nature and premiere quality then Tesla is safe. The Model X already has 15,000 reservations which translates to over $1 billion or more in sales too.
          Grendal
          • 7 Months Ago
          @purrpullberra
          Play nice. Bip is pro-Tesla. I think he was just trying to be funny. Am I right Bip?
          BipDBo
          • 7 Months Ago
          @purrpullberra
          Yes, I am very pro Tesla. And yes, sometimes my humor goes right over (or under) some. It's a fact, though, that Tesla has made most of it's money selling stock, not selling cars. next to that, selling EV credits has been their money maker. The actual numbers aren't available, but I'd bet that isolating the revenue for the cars vs the R&D, manufacturing, distribution, marketing, overhead, etc, the each car is actually being sold at a loss. It's a company that has ridden a wave of popularity to actually be extremely profitable while ironically selling their own product at a loss. Not 100% sure on that, and not trying to bash Tesla. Whatever the profit is, costs will go down and they've established a firm foothold at becoming the fourth major US automaker. Pretty impressive especially considering in how little time it was done.
      danfred311
      • 7 Months Ago
      I don't like it for a secret facility. They could keep their existing two locations plenty secret. I can only think of some kind of unknown logistics reason for the location. Or maybe some early work on battery production if it has to be a separate legal entity.. but I don't get it. I think the "commitment to california" is noteworthy. That's something you don't say without a good reason. Tesla isn't running for mayor so no need for bs job creation boasts. Maybe Tesla and Cali are swapping spit over the battery factory.
        Rotation
        • 7 Months Ago
        @danfred311
        Tesla is running for tax breaks, like every other company. Their commitment to California may just be a commitment to getting the best deal possible on the locations they need.
        MTN RANGER
        • 7 Months Ago
        @danfred311
        Area 51 is always the best location for skunkworks, right?
        Grendal
        • 7 Months Ago
        @danfred311
        Elon did have a meeting with a big politician recently where California tried to put themselves back into the running for the battery factory. So you might be on to something with your speculation, Dan. How about a battery factory for the current battery that the Model S uses? I'm sure Tesla would be more happy if those batteries were made close by instead of being shipped across an ocean. It might also be motivation to get Panasonic to join in.
          Grendal
          • 7 Months Ago
          @Grendal
          The current content of batteries in Japan could go to the Chinese Model S's, leaving this facility to build the batteries for the US and European Model S's.
        MTN RANGER
        • 7 Months Ago
        @danfred311
        Area 51 is always the best location for skunkworks, right?
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