There has been speculation going on in the automobile industry that the Palo Alto based automaker corporation, Tesla Motors is procuring/leasing or probably moving its manufacturing operations to the adjacent Solyndra factory next to its Palo Alto facility in order to cut back production costs and free up production space for its vehicles. Global Research Equities provided some helpful insights behind the speculated move by Tesla Motors in obtaining a lease to procure the 500,000 square feet Solyndra factory situated next to its Deer Creek, Palo Alto manufacturing facility.
Tesla is already building a giant factory in Nevada, which is even larger than the Solyndra factory. They have already begun manufacturing powerpacks in the facility even though construction is still going on. It is understandable that Tesla wants cut costs because, between building its gigafactory and dishing out its new electric car model Tesla is in serious debt! In fact, unless Tesla invests 3.5 billion dollars on theirs Reno factory, they will not get any government incentive! So far Tesla along with partner Panasonic, have only managed to invest a mere 374 million dollars. With the unveiling of Model 3, Elon Musk has promised massive expansion of their superchargers all across the nation. All of these combined are going to be very costly for Tesla.
Global Research Equities analyzed that this speculated move by Tesla Motors can sure be a possibility as the automaker corporation is trying to free up space for the manufacturing of expanded electric vehicles portfolio. So far, confirmation of only three models has been reported by Tesla Motors and they are Model S, Model X and Mass Marker Model 3, respectively. As for the production move to the Solyndra factory, Tesla Motors are well underway in shifting its service center there as well. The reason Tesla Motors is leasing the Solyndra factory to free up space for its vehicles is that currently more than 30 cars are lined up in the Palo Alto production facility at any given day which takes up a lot of room and space and the Solyndra factory will benefit the corporation’s future goal of increasing faster automobile production. Tesla Motors are also likely to shift its engineering operations from its Deer Creek, Palo Alto production facility to the leased Solyndra factory which hopefully will be able to solve the parking management dilemma of the vehicles stored within the Deer Creek facility. The procurement of the Solyndra factory will not only reduce the engineering operations in the Palo Alto production facility as well as dividing the workload for better and enhanced automobile production but also closer proximity between the two manufacturing facilities will facilitate better communication and output. This division of production operations by Tesla Motors comes at a time when the corporation trying to launch more car models each year and efficiently increasing its automobile production is necessary thus to meet their annual target of launching close to 55,000 vehicles in the market for the year of 2015.