Tesla taking over Fremont facility once slated to house Applied Materials plant

Tesla taking over Fremont facility once slated to house Applied Materials plant

By   –  Staff Reporter, San Francisco Business Times

Tesla Inc. has snapped up another manufacturing facility in Fremont to support production of a key battery technology.

The Austin-based electric vehicle manufacturer (NASDAQ: TSLA) signed a lease for 48401 Fremont Blvd., two sources told the Business Times. San Francisco industrial real estate investment trust Prologis (NYSE: PLD) owns the 210,000-square-foot advanced manufacturing facility.

Neither Tesla nor Prologis (NYSE: PLD) representatives could immediately be reached for comment Thursday.

The facility will support production of Tesla’s 4680 battery cell technology, according to one of the sources, who had direct knowledge of the deal but was not authorized to discuss it publicly. The 4680 cell, a more efficient and longer-lasting battery technology, is expected to be a crucial part of the company’s rollout of its Cybertruck vehicle later this year.

The facility at 48401 Fremont was once slated for a multimillion dollar transformation into a manufacturing hub for Applied Materials. Public records from the city of Fremont show Applied (NASDAQ: AMAT), which signed its lease for 48401 Fremont in the summer of 2021, has pulled out of that project, which it proposed in the spring of 2022.

Tesla announced in 2020 it would develop of new battery technology, telling investors it was seeking to improve the range and affordability of its vehicles.

Andrew Baglino, Tesla’s senior vice president of powertrain and energy engineering, told analysts in April the company had spent the first quarter of this year focused on cost and quality of its battery technology.

“Going forward for the rest of the year, the priority one is yielding cost for the 4680 program as we steadily ramp up production ahead of Cybertruck next year,” he said.

The company has said it has facilities supporting the technology both in Texas and in Fremont, where it already operates a 5.5 million-square-foot factory. It employs roughly 22,000 people in Fremont, making it the city’s largest employer.

Fremont city staff confirmed Wednesday Applied had pulled out of its plans for 48401 Fremont but said they could not speak to what prompted the move. The semiconductor equipment manufacturer, which had agreed to lease the space through the third quarter of 2023, put the space up for sublease at the beginning of this year.

Prologis, which acquired 48401 Fremont as part of its acquisition of Duke Realty last year, took the building back from Applied and will lease it directly to Tesla, according to the source with direct knowledge of the deal.

Duke delivered the building in 2021; it was never occupied by Applied, according to marketing materials reviewed by the Business Times.

Leave a Reply

Your email address will not be published. Required fields are marked *