Tesla's footprint appears to be getting bigger in Kyle

Kyle/35 Logistics Park building
Mar 11, 2024
Justin Sayer, Austin Business Journal

Tesla Inc. is linked to another building in an industrial park south of Austin, potentially giving Elon Musk's electric vehicle startup at least 1 million square feet for what could be part of the company's battery operations.

It's the latest example of Tesla's move to quietly eat up real estate around Texas to support its huge factory in eastern Travis County. Kyle Mayor Travis Mitchell said last year that Tesla was expected to lease three buildings at the Kyle/35 Logistics Park, about 20 miles south of downtown Austin, for warehousing and light assembly, and sources previously said the company might take up the entire 1.4 million-square-foot park.

The Austin Business Journal confirmed last month that Tesla leased 962,000 square feet across Buildings 2, 3 and 5 at the business park. Now, a March 6 filing with the Texas Department of Licensing and Regulation links Tesla to at least 127,000 square feet of the 224,000-square-foot Building 1. That would give the company at least 1 million square feet at the 1.4 million-square-foot industrial park.

Houston-based Alliance Industrial Co. is developing the site, which includes five buildings, and in the past was framed as a $115 million capital investment that could create roughly 1,500 jobs.

What Tesla plans to do with the space is harder to define. Tesla has listed a couple Kyle-based job openings on its website, which suggest both manufacturing and supply chain operations will take place in the city. The openings are for an incoming quality supervisor for cell manufacturing, an incoming quality technician for "cell battery" and a supervisor of supply quality engineering, and they state that both production and quality control will happen in Kyle.

A representative of Jones Lang LaSalle Inc., which is handling leasing for the site, did not immediately respond to a request for comment but has declined to comment in the past. Representatives of both Tesla and Alliance have not responded to repeated requests for comment.

EV giant is getting even bigger

Tesla's footprint continues to expand across Central Texas and the state as a whole. Its headquarters is based at its massive gigafactory in eastern Travis County about 35 miles from Kyle, and it is already the region's second-largest employer with more than 20,000 employees — a figure that could triple in the coming years.

Tesla produces its Model Y SUVs and the futuristic Cybertruck at the Austin factory that spans more than 10 million square feet of floor space. It also manufactures driving units, battery packs and its own 4680 cells for its batteries. Tesla makes its own castings as well, and its factory includes plastic injection molding, stamping press lines, general assembly, a body shop and paint shop as part of the company's goal to become more vertically integrated.

Near Corpus Christi, Tesla broke ground last year on a lithium refining plant. That doesn't include the roughly 36,000 square feet Tesla has in Hutto, northeast of Austin, for purposes that haven't been made public but also appear to be tied to battery efforts based on job listings, and the 440,000 square feet of warehouse space in San Antonio. The company also utilizes the auto ramp at the RCR Taylor Logistics Park in Taylor to ship its vehicles.

The company's footprint doesn't include the suppliers that are flocking to the region to be close to it. Two big projects are headed to Georgetown that may have connections to Tesla: US Farathane Corp. and Hanwha Advanced Materials LLC.

Kyle itself has landed Simwon North America Corp., an automotive body manufacturer that's reportedly a Tesla supplier; Plastikon Industries Inc., a plastic parts manufacturer that supplies Tesla and Toyota Motor Corp.; and XCharge North America, a manufacturer of electric vehicle charging equipment that has conformed to the standards of Tesla charging equipment.

With whatever Musk has up his sleeve, Tesla is poised to become a major employer in Kyle. The city's largest private-sector employers currently include Ascension Seton, FedEx Corp., Lowe's Cos. Inc. and Amazon.com Inc., the latter three of which operate fulfillment and distribution sites there.

Mitchell, who revealed Tesla's plans to lease space during his 2023 State of the City address, said at the time that Tesla's presence will help "provide credibility to the city of Kyle as a potential location for employment."

"Any time a major employer and a top-tier company shows interest in your community, it's almost always a good thing," he said. "It's one of our core pursuits. The cultivation of employment centers and primary jobs in the city is an important goal that we have."

Read Original Article