Tesla bought an old GM-Toyota factory and made it cool - but in its former life it built a lot more cars

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Tesla bought an old GM-Toyota factory and made it cool - but in its former life it built a lot more cars

Tesla Factory

Benjamin Zhang/Business Insider

Inside the Tesla factory.

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  • Tesla is struggling to hit its manufacturing targets for the Model 3.
  • Its factory produced close to 450,000 vehicles annually when it was run by GM and Toyota.
  • Tesla bought the plant for $42 million in a 2010 - a massive bargain.


Tesla is deep in what CEO Elon Musk called "production hell" on its new and hotly anticipated Model 3.

The vehicle is currently selling for $44,000, but base-priced at $35,000 for a version that doesn't have all-wheel-drive and premium appointments. Tesla has about 500,000 pre-order in the books, at $1,000 a pop, but production is troubled.

Tesla said it would build 1,500 Model 3s in September, but in the entire third-quarter, it managed only 260 vehicles. It's unlikely that 20,000 Model 3s will roll off the assembly line in December, as Musk predicted.

Meanwhile, Tesla has a good chance of building about 100,000 Model S and Model X luxury vehicles in 2017 - more than ever before.

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Interestingly, Tesla's factory in Fremont, CA, has a theoretical manufacturing capacity of 500,000 vehicles annually. That's because back in the 1980s, it was called New United Motor Manufacturing, Inc. (NUMMI) and was run as a partnership between General Motors and Toyota.

If Tesla has an Achilles' heel, it's that it can't build cars with the same relative ease as other major automakers. The contrast between what was happening at NUMMI in the '80s and what's happening now highlights this problem.

Get the latest Tesla stock price here.