Tesla Plans $1.26 Billion Expansion At Fremont Factory For Model 3 Production



 Tesla Model 3

Tesla Model 3

Tesla’s Fremont factory will need some significant upgrades/alterations to produce the upcoming Model 3.

We’ve now learned that the factory will require an investment of at least $1.26 billion as part of an expansion plan set forth by Tesla Motors.

News of this investment comes via a Reuters article focused on tax breaks in the state of California. On the topic of Tesla, Reuters stated:

“Tesla has received millions of dollars in state incentives, mostly recently a $39 million break on sales tax tied to its $463 million expansion of the Fremont plant to boost production of the Model S and Model X. State records show the company also has applied for a $106 million tax break on a planned $1.26 billion expansion of Fremont to build the new Model 3 sedan.”

Tax breaks are common in the auto industry, so the $106 million Tesla is seeking is not news to us, but the cost of expansion is of interest.

Source: Reuters

Categories: Tesla

Tags: , ,

Leave a Reply

89 Comments on "Tesla Plans $1.26 Billion Expansion At Fremont Factory For Model 3 Production"

newest oldest most voted

$2.8 billion for SolarCity, $4.5 billion for Chinese factory, $unknown billion to complete the Gigafactory and now another $1.26 billion for Fremont expansion… Tesla sure isn’t holding back

solar city was a stock trade so no cash needed. the china money is all speculative. the fremont expansion is the only thing that costs.

It’s still a cost. They need to reissue new stock to pay for it. The same stock could have been used to take in more cash instead.

Let’s hope Tesla doesn’t run out of money like the James River and Kanawha Canal did in the 1850’s were they had to stop construction very suddenly.

That’s true but all the SCTY stock disappears, so if you are a generic “Musk Fund” holder, it’s a wash.

The China expansion has a monkey wrench thrown into it. They will only approve EV’s made with the LiFePO4 chemistry.

Tesla will have to change something eventually to be able to sell and manufacture there.
What will change could be the battery chemistry or Tesla can try and leverage their investment to have the Chinese Gov make an exception.
Either one is heavy task no matter how you deal with it.

Quite frankly if China wants to retain WTO membership it needs to stop pulling this sort of thing. This current issue with Lithium Ion batteries is ridiculous.

You need LiFePO4 chemistry to get the national Chinese subsidy. Local subsidies are a different matter.

Nissan builds a version of the LEAF with its JV partner in China using lithium-ion.

Forgive me, but where on Earth has this come form? It’s complete baloney… “The Chinese Government has passed legislation that requires EV cells to soon achieve an energy density of 200 Wh/kg. This is simply impossible with the LiFePO4 chemistry…” (http://pushevs.com/2016/06/10/china-starts-replacing-lifepo4-with-nmc-for-evs/)

Trollnonymous said:

“…China… will only approve EV’s made with the LiFePO4 chemistry.

“Tesla will have to change something eventually to be able to sell and manufacture there.”

Looks like you’re referring to this recent InsideEVs article:


Read it again, please. The article says that China is cutting off gov’mint subsidies for EVs made using higher energy density types of li-ion batteries. It doesn’t say that China is banning the manufacture or sale of EVs that use better batteries.

It’s just one more way China is signalling “We don’t want better made foreign imports competing with our cheaply made, poor quality controlled domestic products.” 👿


It is long past time for the west to put a stop to this BS from China.

I believe that the Tesla cars still retain their current Li-ion chem and not BYDs.
And I doubt that Tesla will move battery production to China.

If the US$ keeps going up, Tesla may find it harder to sell their cars to the rest of the world.
I would not trust China or build a factory there.

Tesla will not be exporting from China.

They are just breaking out right now, model 3, model y, new roadster, i think a more compact city car like the leaf around 2020 that wil sell in insane numbers

“a more compact city car like the leaf”

No, please. They should make a pickup instead.

Also, but a golf / leaf car just can be sold in the highest numbers mass market. Ofcourse the Tesla version will be 10x better!

Ford sells 50K-70K F-series trucks PER month — goodcardbadcar has the states. Add in Chevrolets, Dodges, Toyotas…

Future cheaper versions of the Model 3 can handle this.

Although I agree with the pickup truck, it isn’t as simple as body paneling. First, there’s some physics about hauling which were pretty well played out with the Model X, where towing introduced a 60% hit on range. Second, Tesla is all about stability in a roll-over and so much in terms of safety. Trucks are extremely rough, and off-roading is expected. What do you build between the battery and the bottom of the vehicle, to protect it?

I don’t think safety is the real issue here.

Aggressive streamlining, as Tesla has done on the Models S, X and ≡, is impossible in a pickup.

And you’re right about the towing problem. Current BEVs have rather limited energy available, and towing sucks that away rapidly.

Both the above factors combine to make a BEV pickup have quite limited range, especially when hauling a load or towing. And why bother to build a pickup if it can’t haul or tow stuff? BEV pickups should wait until battery packs have a lot more kWh.

In the meanwhile, we can hope that some other auto maker will offer a PHEV pickup, which would be far more practical. Let it operate as a BEV when it’s not hauling stuff, and in ICEV mode when it’s hauling or towing a load.

Here’s hoping that GM will put a Voltec drive into a pickup, and soon!

Most pickups are used as in-town vehicles, not long-travel vehicles. So for most pickup owners, range and drag are less important. More important are towing capacity, cargo capacity, AWD power, and styling. And for work trucks, AC power out would also be a benefit… no need to carry gas generators.

Streamlining could lead to something like an electric El Camino. I don’t know whether the truck market would find that appealing.

It’s the bed of a pickup that creates all the wind resistance. Making it an “El Camino” style (for those too young to know, that means a car in front and a pickup bed behind) isn’t going to help much with that.

Some pickups have a hard lid over the bed, to cut down on wind resistance. Obviously Tesla could do that. But that hard lid also reduces the utility of the bed, as you can’t put anything in it that sticks up.

Most third-party bed covers either retract or fold out of the way. And most are also removable.

I have no doubt they’re removable.

I question your assertion they are “retractable”. Can you link to a picture?

I’ve seen pickups driving down the highway with the hard lid propped open precisely because they can’t be retracted or folded. Of course, that’s no proof that none of them can, but obviously at least some of them can’t.


I shoulda Googled that before I made my last post.

My brother in law has 67 el camino with over 600 hp…yes he is a petrol head lol

Those are called Ute in Oz.

Yes streamlining a pickup is close to impossible indeed although somewhat better can already help, but there is something else where we can be use a more aggressive attitude, the battery.
There is no reason to stop at the 90 KWh of the Model S and X, with a falling prices, it now becomes possible to supply what it really takes for a pickup a 200 or 300 KWh battery. A pickup has the place and size to fit in such a big battery. No matter if it is not efficient to do that, if that is what it takes, it is what has to be. That’s 29000 $ 43500 $ worth of cells according to a 145 $/KWh base line which will sure make an expensive pickup, but on the other hand what a beast! Torque, acceleration and off-site high power supply up to a megawatt of power available on the truck sockets.

Auto makers have to base the selling price of a car or light truck on expected sales. With a larger sales volume, development costs and per-unit costs of parts can be brought down, so the selling price can be brought down — witness the relatively low projected price of the Model ≡, which is expected to sell in much higher numbers than Tesla’s previous cars.

A BEV pickup that costs far more than what most pickup buyers would be willing to buy, would not sell many, and would have to be priced very high indeed.

Let’s remember that most pickup drivers either live in rural areas or are “blue collar” workers or their families. In other words, people who mostly have lower income than the upscale buyers of the pricier Tesla cars. Sure, you can find exceptions; but few if any auto makers will marginalize their market by aiming at only some exceptions in a given market segment.

Of course the US and European situation on pickup are exactly reverse. Blue collars drive with cars or vans never pickup and pickup are actually used by super wealthy people and land owners to kind of show off the shinny chrome and massive size just like they do with a land rover. So in that market a more expensive pickup is rather more show off and therefore better because more exclusive.A bev one would therefore be the ultimate must have whatever the price. It is a very bizarre situation with completely different markets but perhaps there could be some advantage to that. Starting in Europe first and reducing price progressively until sales are possible in the US.

I think there’s a market for a high end electric performance pickup. Performance being key. Make it smoke any pickup truck ever made 0-60 and in the 1/8 mile drag race. And be a capable off-road truck.

A 150 kwh base model should be awesome for those that don’t need long range, though SuperCharging will enable long trips. 200 and 300 kwh versions available.

That is a great idea. Priusmaniac, about upscaling the first Tesla pickup. Just like Tesla did with the Model S, their first pickup should take on the biggest baddest trucks out there, the four door tricked out models that already cost a fortune to buy new: expensive, high profit trucks. Tesla will smash the competition on acceleration, with insane torque, and tempt with high tech goodies, and efficiency that blows petro-powered trucks away.

Tesla will have some tricks to improve those aero problems. Maybe rear gate folds away when the bed is empty, removing that air damn, for instance. Or an aero bed cover that folds away for cargo use.

Tesla needs a pick up truck and a SVU in that US oil demand is skyrocketing due to everyone running out and buying SUV’s and pick up trucks with the cheap oil.

If Tesla could make a SUV with a 200 mile range it would cripple US oil demand forever.

They sort of have an SUV with the Model X. However, it is too expensive. They need a model Y. Hopefully sans the too expensive doors. Just build a 5 seater.

I would like to see Tesla buy VIA and actually do something with it. Make them VIAble.

Pick-ups just don’t make sense for pure EVs right now. They are aerodynamic disasters. And they are often used rurally where they need to drive long distances and there are few chargers.

GM should be attacking the pick-up market with their Voltec technology. But I suspect that all the traditional automakers are dragging their feet on building pick-up and SUV PHEVs because it will destroy their current huge profit margin on traditional ICE pick-ups and SUVs.

A sub-compact like the leaf WOULD sell if it is around $20-25K.
BUT, to get there, they need to continue growing fast, and get their battery prices down.

Tesla is shacking out the shorts.

Did you miss the 10.5% drop in TSLA share price yesterday?

That is how you shake them.

Look at the big picture. You probably spend $2000 a year on utility. If you by a $35,000 car from Tesla you will not pay the utility company anything. But for the $35,000 or even less you will get the car and electricity for the house and the car for life. A very good deal.

Are you trolling again with your flawed math?? … I shouldn’t call it math, rather a bad fantasy.

I don’t see them going on with Chinese expansion before model 3 is steadily rolling out of the Fremont line.

Hmmm, I’m not so sure of that. It takes two years to properly build or renovate a factory, and fine-tune it for efficient volume production.

Given Tesla’s very aggressive plan for ramping up production, they’d best get started on the new assembly plant ASAP.

But I hope Tesla stockholders give a very firm “NO!” to the SolarCity buyout. Tesla has enough irons in the fire, between the Gigafactory, getting the Model ≡ ready for production, and dealing with problems in the Model X; adding oversight of building a solar panel factory would be spreading management focus rather thin.

SolarCity has management too.

Yes, and do any of them deserve to keep their jobs? If they were managing the company well, then it wouldn’t be in need of a buy-out.

If Elon takes over the company, you can be sure most of them won’t stay long. Just like when Elon took over Tesla Motors, and forced out Martin Eberhard, with Marc Tarpenning following not long after.

Add also the issue with the corrupt Chinese govt on the their decision here…

Adam Jonas changed price target to $245 from $333, this morning. He was “the bull”. I think the equity raise was for the purpose of Fremont’s expansion, in part.


No matter how the cars turn out, I don’t see as much shareholder faith in Elon Musk going forward.

Thanks for the link, very interesting.

“An acquisition of SolarCity Corp. would not help the electric vehicle manufacturer make better cars, improve the company’s cash position, or improve its access to capital to fund growth projects”

Very true. Especially that last bit is interesting, in May Tesla raised more money by issuing stock. People were a little upset by this but they realized that it’s needed to ramp up production. Now Elon want to do this crazy deal with SolarCity, diluting the stock even more. This isn’t what was supposed to happen, Tesla should sell cars not solar panels. What will investors think the next time Elon needs to raise more money, will they bite? Will Elon come with another surprise when he gets this money? Perhaps SpaceX is the next one to be bailed out by then?

I think this SolarCity deal, even the mere proposition of the deal, has made it much more difficult for Elon in the future.

You don’t understand what SolarCity is doing, nor what Tesla is doing. Tesla is not just a car company, it already was an energy company as well (superchargers, powerpacks, etc.) and SolarCity is not a solar panel maker nor an installer, but an energy company as well. And they can have synergies. Just one exemple (there are many): the low cost of getting the energy to run all your factories from your own, home made solar panels.

Tesla is NOT an energy company. Yes, they make batteries but that is just energy storage, not energy production.

Not yet, but I think they will be. And long term I think there is tremendous upside for them to be an energy company.

I wouldn’t be at all surprised if the apply for the “permit” that Apple just applied for, and that even Google had already received to allow them to sell electricity directly to customers.

The SolarCity acquisition was meant to leverage Tesla’s residential and commercial batteries. The connection is obvious.

They are not selling any batteries because no one wants to buy them. Getting off the grid is a tiny niche market that only the most hardcore environmentalists and tin foil hatters care about.

Aren’t some of the biggest customers for Tesla Energy the power companies and large corporations?

Telsa powerwall is mainly a load shift device
Excess solar used when sun down
Usually fitted as a complete install as panel optomisers needed
So having battery panels and install makes sense to sell more batterys

You don’t seem to understand batteries either. As Richard said, it’s about load shift, not getting off the grid. Look at the summer electric rates in Nevada, for example. The rates can be gamed for great cost savings with residential battery use.

But it’s much too expensive except for a few extreme cases, most people will never make back the investment in a Tesla battery by load shifting.

That sums it up pretty well.

Looking at the current Nevada rates, it doesn’t look “much too expensive” at all. There’s a lot of money to be saved by running on solar + battery during peak hours. I fully expect SolarCity to reenter that market with a battery package, similar to what Adara is offering with its batteries.

You have used correct phrase “rates can be gamed”. Yes, residential rates can be gamed as they are mostly per kWh unlike industrial rates that account for peak power requirement, than can be more than half of the bill. The question is, for how long you can game the rates? People running utilities are not idiots and will cut down the rigged game quickly once such gamers will account for significant share of residential users. SCTY business model is not sustainable nor scalable. They may keep their current leases, expand a bit, but they can’t expand a lot just on rate gaming and greenwashing. Solar at wide scale without seasonal storage can compete just with replaced natural gas fuel cost – not power plant cost, but just fuel as you still need full power from gas turbine for backup. That is some 2-3 cents/kWh in the US. It is within reach for big commercial projects and they will take over this market. Residential grid-tie rooftop solar can’t compete at that price. And PV panels are even less than half of the residential solar projects now.

No, they are not selling many because the market is really new, the economics don’t work in most places, and the batteries are still a bit too expensive.

HOWEVER, it will be a growing market. Net-metering arrangements are being dropped in favor of ‘value of solar’ tariffs and other arrangements such as the new one in Hawaii. These new arrangements make the market for batteries much more desirable.

Very few batteries will be sold for off-gridders, that is a small niche market. YOu are looking at the wrong thing.

Yes, batteries are much too expensive still.

The claimed synergies with SolarCity is packaging SolarCity’s solar panels with Tesla’s batteries for residential use. That is a very small market and certainly not worth investing $2.8 billion in when Tesla could just buy solar panels from anyone – probably much cheaper Chinese solar panels – if they wanted to.

Which wouldn’t make much sense either by the way because that is not Tesla’s business. Such a business venture would make much more sense if SolarCity just bought batteries from Tesla and made their own packaged deal. It could easily be done if it weren’t for SolarCity being on the brink of bankruptcy which is the real reason for the deal – to save the Musk family face and money.

Where, exactly, are SC panels manufactured?

The ones Solar City installed on our house were made in Singapore.

Currently, SC buys their panels from multiple sources.
However, SC has a factory going up in NY, that will produce panels cheaper and more efficient than anything coming out of China.

Getting off the grid is a tiny niche market that only the most hardcore environmentalists and tin foil hatters care about.

It’s true that the Tesla PowerWall home energy storage market is a tiny niche, but there is a much greater potential market for the commercial/industrial Tesla PowerPack. The ability to smooth out demand spikes could save a lot of companies a great deal of money. That’s why there was so much interest expressed in PowerPacks, before Tesla revealed that the retail price will be much, much higher than the wholesale price they talked about in an earlier press release.

Once the Gigafactory is producing in quantity, Tesla might be able to bring the PowerPack price down to something many companies could afford… and then the market will take off like a rocket! …a SpaceX rocket, of course. 😉

“Someone Out There” is full of FUD…

Are you full of rainbows and unicorn farts?

You have to ask?

Musk’s non-stop spending habits remind me of what Dirsken once said about Congress:

“A billion here, a billion there, and pretty soon you’re talking about real money.”

~Senator Everett Dirksen

I was thinking Carl Sagan… “Billions and billions..”

Sagan was proven correct.

That’s what happen when you suddenly have 400 000 x 42 000 $ = 16 800 000 000 $ shinning ahead of you.

You start to do what you already though off but weren’t daring up to then. In more Space X is starting to become very interesting too with now four Falcon 9 stage 1 waiting for reuse. They will need some work but they sure will slash millions from the relaunch cost compared to the 65 millions of a brand new rocket.

Since you have got to spend those 16 800 000 000 $ and more somewhere, it may as well be here and there. As long as it is electric, renewable or leading where no man has gone before.

For instance I would also spend on thermo acoustic heat pumps since that can be useful for several things also like in cars, as CFC free airco, in houses, to replace fossil fuel heater, and on Mars as more efficient heating system than electric resistors. If Elon simply say they could make a division it would sure draw the top best specialist in the world and quickly deliver yet another disruptive revolution.

and yet, a better comparison would be amazon and bezo.
Bezo fought fools like you to continue pouring money into amazon so that they can compete against Boxes and China.

The interesting thing is that whatever Musk proposed, he was not believed and people said it wouldn’t work. That is understandable. He sees the horizon, we look at our shoes. But even if we look at our shoes, we should be concious of the fact that the first of those absolutely crazy projects who would never ever work (making the roadster, landing rocket stages, mass producing the S and selling it, cutting the price of space delivery at least in two) actually worked.

We try to figure out in the here and the now if the merger makes sense, with our ideas rooted in the past, but Tesla and SolarCity are already miles ahead.

Musk, Straubel and the others don’t feel bound by what others have done and have no message at “others haven’t done it, so it is impossible.” They are not geniusses, just people who use their brain, who think for themselves. And follow what rationally seems obvious.

If all those experts and wall street people would say: this is great, this merger is doable, then I would start getting nervous, because it would mean Musk & Co are losing steam 😉

The reason Tesla Motors has so many supporters and fans is because the company has earned our respect and admiration; respect and admiration for both its vision and its achievements.

The attempted acquisition of SolarCity deserves neither. At best it’s a dumb business move; at worst it’s Elon Musk trying to use his position as CEO of a publicly owned company to bail out his personal debt.

No, it is not a foolish move.
They are planning on putting panels AND BATTERIES on homes.
I think that they are also likely to go after bringing in the electronics for SC and Tesla.
That will allow them to drop their prices a great deal.

Solar power, grid storage batteries and electric vehicles have all been around since Musk was in diapers.

Everybody already knows these things and Musk is no genius for merely bringing up these old ideas that are not even his own.

The basic problem for solar power, by and large, still too expensive. Solar storage is also too expensive. And the electric cars themselves are too expensive for true mass adoption. Musk’s proposed acquisition of Solar City does absolutely nothing to change any of this. Numerous breakthroughs in technology are needed before electric cars can really displace the gasmobiles.

Unfortunately, Solar City is not bringing any new, innovative or revolutionary technology to the table for Tesla. Instead, Solar City brings only a failed business model, debt and distraction from Tesla’s core business, building phenomenal electric cars.

Well, in fact there is a difference, one that doesn’t appear to you because if you are here you likely very well informed, but to the man on the street it is not obvious at all that solar panels can produce electricity, that it can be stored in a battery and that an ev car can be charged with it. And if he can imagine it, it is yet completely different to see it as one single package, single shop, single stop easy and simple proposal. And just because it is a single shop, single contract proposal Tesla can reduce the package price of it and make it all the more attractive.

As long as it means that I can get a packaged deal on a car and solar panels for much less then I’m for it.

Also, anyone know where the cells are actually made?

I think currently solarcity get their solar panels from a Chinese supplier made with cells from Taiwan to bypass the US tariff on Chinese made cells.

Tesla on the other hand get their cells from Panasonic made in Japan.

Solar city have their own manufacturing plant on the way in the us. Just as tesla is building their own batteryplant. All in all it actually makes sense. They will start to provide quite a bit of a power vertical.

That’s a bit of an understatement – SC’s factory is colossal – the biggest PVP factory in the US, in fact… assuming it ever opens. Wiki-p says it was due to be open by now…

It’s also worth a mention that when the financial pundits start banging on about how SC and Tesla are not making any money, then *never* mention these truly huge on-going, cash-guzzling projects. I wonder why?

The cells and modules will be made in up state New York. SC purchased Silevo a while back. They had made arrangements with New York to build a 200 mW facility there. They renegotiates and made it a Gigawatt facility. The module compare with SunPower modules for efficiency and are much less expensive to build. I have 3 on my house as a test when they first came out. Very nice modules. I have then installed with Darfon microinverters and the power has been very good with no failures in 3 years.

Electric cars can run just fine using the current electric grid.

Cars that run on sunlight alone is a noble and appealing goal, but the reality is that a pure, solar only, zero emissions grid is most likely decades away.

My advice to Musk is to stick with building electric cars. There are already lots of really bright, thoughtful people hard at work trying to convert the grid to 100% renewables. It’s obvious that Solar City doesn’t have the secret formula to do this or they wouldn’t be on the verge of closing up shop.

I think Solar is getting really cheap. I have seen a huge drop in price for panels if I compare to 9 years ago here in Sweden. Only thing still expensive is the inverters/converters. Future for solar looks bright.