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Tesla is doubling the size of the factory in Fremont, California, where it makes its cars.
The company recently submitted a plan to the city of Fremont for an additional 4.5 million square feet of buildings, essentially doubling the amount of factory space. The move comes as the company sets the ambitious goal of increasing its manufacturing output to 500,000 by the end of 2018, even as some analysts and investors have worried about its track record of missing delivery targets.
Tesla said earlier this month that its production numbers hit a new record of 25,185 for the third quarter, a 37 percent rise over the previous quarter. Still the company will probably badly need the new space to meet not only its overall production goal, but also a successful rollout of the Model 3 sedan —Tesla's chance to break into the mid-priced car market.
Earlier this year, Tesla CEO Elon Musk said the company is aiming to make 100,000 to 200,000 Model 3 sedans alone in just the second half of 2017. At its current rate of roughly 2,000 cars per week, the company would only make 104,000 total cars for the whole year.
This is what the plan looks like, according to the proposal:
The proposed buildings are outlined in red on the image, and there is a red dashed line outlining Tesla's property.
The Fremont Planning Commission is scheduled to meet Thursday to discuss the plan and choose whether to recommend an approval to the Fremont City Council, which will likely hold a meeting next month to decide whether to approve the plan.
"We are really excited," said Fremont Mayor Bill Harrison in an interview with CNBC. "Tesla has been expanding in Fremont over the last few years, and we think the submission of this plan solidifies their investment in Fremont. But it also shows people that we can still manufacture in California."
The factory currently employs about 6,210 people, according to the proposal Tesla submitted to the commission. The new square footage would create an estimated 3,105 to 9,315 jobs, the proposal said. A BART mass transit rail station will open soon next to the plant, making it the only auto manufacturing plant in North America to be next to mass transit, Harrison said.
Local laws require that Tesla first grant permission for its larger development project, then obtain permits for individual buildings, which Tesla may build over a period of several years. Tesla will also be able to make some changes as it goes forward.
"This is a conceptual plan, this gives them flexibility in the future if they need to move things around as they get closer to rolling out the Model 3," Harrison said.
Harrison said he thinks the expansion will also attract other companies "that want to be around Tesla," such as solar power firms, battery companies, and other businesses, and that the city is already beginning to see such interest.
"We are calling it the 'Tesla effect,'" he said.