upstart car company Tesla Motors stands on the main floor of the New United Motor Manufacturing plant and looks with awe from one giant piece of machinery to the next. The car factory, known as Nummi, is located in Fremont, California, but it’s an industrial city unto itself. It encompasses 5.5 million square feet and contains a plastics molding factory, two paint facilities, 1.5 miles of assembly lines, and a 50-megawatt power plant. Since 1984, Toyota and General Motors had run Nummi together, producing as many as 450,000 cars a year here until it was shuttered in April. Now, in a remarkable turn of events, Musk owns the place.

He seems as surprised as anyone at this development. For years, the exuberantly ambitious entrepreneur wasn’t even allowed to visit. Plant managers apparently frowned on the idea of a potential competitor touring the facility. Not that they had much to fear: In 2009, Tesla managed to produce only about 800 high-performance electric sports cars—a niche manufacturer in an industry that churns out millions of vehicles.

But Musk never intended to be a niche player. After making roughly $180 million as a cofounder of PayPal, he helped get Tesla off the ground in 2004 with an initial investment of $6.3 million. The startup’s audacious business plan had three steps. First, develop a high-end, high-performance sports car to prove that electric vehicles were both cool and feasible. Second, roll out a luxury sedan that would compete with high-end brands like BMW and Mercedes. Third, produce hundreds of thousands of low-cost electric vehicles for the masses.

Musk has pulled off the first step. In 2008, Tesla released the Roadster, a two-seat sports car, and has since sold just over 1,300. By 2009, the government agreed to loan the company $465 million from an alternative vehicle fund to launch phase two: Challenge the car industry head-on by mass-producing the Tesla Model S, a stylish four-door sedan powered by more than 7,000 lithium-ion batteries.

Just one problem: Musk didn’t have a factory. Tesla was outsourcing most of the Roadster manufacturing, assembling the cars one by one in a garage behind its showroom in Menlo Park, California. (The building had once been a Chevrolet dealership.) Fabrication on a mass scale was obviously impossible there. Musk needed a legitimate facility like Nummi, but the plant had recently been valued at nearly $1 billion—way beyond what a small startup could afford.

But in March of this year, Nummi plant managers got an unexpected call. Akio Toyoda, president of Toyota, had given permission for Musk to conduct a clandestine tour. Toyoda wanted to see whether Musk was interested in buying the factory and needed to keep it quiet to prevent media attention from scuttling a deal. At the time, the car industry was in the process of retrenching after the economic meltdown of 2008. GM had already pulled out of the plant after declaring bankruptcy in 2009, and Toyota planned to stop production in less than a month. There weren’t too many people interested in buying a 200-acre white elephant of a car factory, so Toyoda opened the door for Musk.

On his first visit to Nummi, Musk donned a hard hat, a blue jacket, and plastic safety goggles and acted as inconspicuous as possible in the hopes of not being recognized. As a Nummi plant manager led him discreetly through the factory, he gawked at the massive scale of the place and tried to suppress his excitement. Hundreds of Toyota Corollas and Tacoma trucks rolled down the assembly lines. Thousands of people buzzed about. It was everything he had dreamed of for Tesla. He offered what he had budgeted for a more modest factory: $42 million. A month later, to his astonishment, the offer was accepted.

Now, on his second visit to the plant—his first as its owner—Musk is trying to get his bearings. Just five weeks earlier, Tesla had gone public, netting $238 million and making it the first American car company to complete an initial public offering since Ford in 1956. As a result, the company has access to more than $700 million, a significant portion of which will go toward retrofitting the facility. It’s a daunting task. Musk walks past row after row of motionless robotic drills. A multiton crane stands idle beside a 60-foot-tall steel press. The ceiling soars high overhead, making even the press look somehow small. For a moment, Musk appears overwhelmed by what he’s gotten himself into.

“Holy crap, this place is big,” he says, but then he flashes a smile. “It’s perfect.”

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Authors: Wired

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