Tesla nabs an auto supplier from Detroit’s back yard in order to increase production

Tesla Model S

Tesla wants to make more cars, and they’re going to the heart of America’s motor industry for help.

According to the Detroit Free Press, the electric automobile manufacturer reached a deal to acquire Riviera Tool, a Tooling and Die auto supplier base in Grand Rapids, Michigan. This is significant in a few ways, not the least of which is how the deal marks Tesla’s first major acquisition.

The other significance is that the Silicon Valley-based automaker now has a presence in the back yard of America’s big three. Furthermore, it’s about the only Tesla-related facility anyone will see in Michigan for the time being as its Governor has passed a bill into law that bans the automaker from selling cars directly to its customers.

Tesla Model X

The automaker has worked with other suppliers in the past, but this move brings the production in-house, with the ability to regulate things more closely. This move is also crucial to the need for Tesla to increase its output capacity.

The move couldn’t come any sooner, either. Right now, Tesla is keen to expand production of its acclaimed Model S sedan, on top of the fact that its repeatedly delayed Model X still hasn’t come out yet, and there’s a Model 3 coupe looming in the company’s future.

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Company co-founder and CEO Elon Musk as admitted that they may have underestimated the logistics of launching a global product.

Riviera, for its part, will stamp out parts and ship them to Tesla’s Fremont, California assembly facility. The company has about 100 employees and, according to an off-the-record source, Tesla isn’t looking to clear house. In fact, Riviera might become Tesla Tool & Die.

It’s a good start to make good on the many promises the company has made. Electric cars may be a big part of the future, but Tesla better meet demands quickly if it wants to continue to be a part of it.