Image: Tesla
Tesla is quietly deepening its roots in Silicon Valley, even as it publicly positions itself as a Texas-based company and increasingly pitches investors on a future dominated by robots and artificial intelligence. According to a new report from CoStar, Tesla has finalized a lease for a massive 267,099-square-foot advanced manufacturing facility in Fremont, California, just steps away from its flagship factory.
The newly leased space, known as Milmont Industrial, was developed by Hines and completed only last year. The property sits on a 14-acre site in Fremont’s Advanced Manufacturing Row and features modern specs tailored for high-tech production, including heavy power capacity, high clear heights, ample loading docks, and strong transit access. The facility’s owners, Hines and Oaktree Capital Management, have already listed the fully leased property for sale, underscoring continued demand for premium industrial space tied to AI-driven manufacturing.
Tesla hasn’t confirmed exactly how it plans to use the new facility, but the timing is notable. CEO Elon Musk said during the company’s most recent earnings call that it is transitioning “from a hardware-centric business to a physical AI company,” with humanoid robots like Optimus playing a central role. Tesla has also confirmed plans to phase out Model S and Model X production in Fremont and ramp up Optimus instead.
Tesla aims to begin production of Optimus V3 — its first mass-production humanoid robot design — by the end of this year, with an ambitious long-term goal of ramping up to one million robots annually in Fremont. Musk has previously called Optimus “the biggest product of all time, by far,” and recent demo videos have shown the robots performing tasks ranging from factory work to food service.
This new lease builds on Tesla’s growing real estate footprint in the region. As reported last month, the company also quietly picked up a 108,000-square-foot AI-focused research and development facility near its Fremont factory, reinforcing the city’s importance to Tesla’s robotics and AI ambitions.
Despite a slowdown in vehicle sales and broader caution in industrial real estate investment, Fremont remains one of the most strategically important manufacturing hubs in California. Tesla is already the city’s largest employer, with roughly 30,000 workers, and continues to hire engineers and AI specialists locally as it bets its future on autonomy and robotics.
