FREMONT, Calif. (MarketWatch) — Fast-growing Tesla and the East Bay city of Fremont share a common goal. Both are determined to prove that advanced manufacturing can be successful in one of the country’s highest cost areas.

Tesla TSLA, -3.72% threw a lifeline to this beleaguered industrial town when it took over the sprawling manufacturing facility built by General Motors GM, +0.11% in the 1960s and abandoned in 2010 by Toyota TM, +0.57% during the auto industry recession. Fremont was further hurt in 2011 by the bankruptcy of solar cell producer Solyndra that cost 1,100 jobs. Today that facility is used by Solar City, which recently merged with Tesla.

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Tesla has 6,200 workers in Fremont and plans to hire 3,100 more as it gears up to produce the Model 3 later this year. Tesla is Fremont’s biggest employer and the city council just approved construction of 11 new buildings on Tesla property.

Fremont Mayor Lily Mei Barry Wood

Mayor Lily Mei says Tesla is central to the city’s plan for advanced manufacturing in the area adjacent to the soon-to-be-opened rapid transit station in South Fremont. “Tesla,” says Mei, is “a wonderful opportunity to lead in the development of the Warm Springs innovation district.”

The Bay Area Rapid Transit system, or BART, is expanding its line five miles south to a new South Fremont/Warm Springs station. Tesla boasts that it will be the only U.S. auto plant situated on mass transit.

Tesla’s car factory in Fremont, as viewed from the South Fremont train station. It has 5.3 million square feet of manufacturing and office space. Barry Wood

Tesla enthusiasts emphasize that Elon Musk’s company is really a Silicon Valley startup that is also a manufacturer. Because it is just north of San Jose and linked to Menlo Park and Palo Alto by the Dumbarton Bridge across San Francisco Bay, Fremont geographically is in the Silicon Valley.

Fremont’s former mayor, accountant Bill Harrison, is a promoter of that argument and he dismisses critics who say Tesla is burning through cash and will ultimately fail.

“I disagree,” he says, “I think Tesla is a fascinating company headed by the Albert Einstein of our day. Elon Musk is an amazing person and everyone who has bet against him has lost.”

Tesla’s mass-market Model 3 electric cars will be built at a former GM factory in Fremont, Calif. Tesla Motors/Handout via REUTERS

For now, Tesla is hiring both in Fremont and at its Gigafactory for lithium batteries outside Reno, Nev. Nevada Gov. Brian Sandoval announced in January that Tesla will spend $350 million and hire 550 workers to begin production of the watermelon-size motors that power Tesla cars. Both batteries and the motors will be shipped by truck 250 miles west to Fremont.

Musk says a tightly run supply chain is critical to successful manufacturing. He has announced ambitious plans to boost vehicle output at Fremont to 500,000 units per year. Critics note that Tesla produced only 76,000 cars in 2016 and that even a fivefold increase in output by 2018 is unrealistic. Tesla has an advantage over traditional auto companies as its workers don’t have to deal with exhaust systems, transmissions or engines.

Tesla, which this month dropped the word “Motors” from its name because of the acquisition of Solar City, is having no difficulty in finding workers. Steve Levy of Palo Alto’s Center for Continuing Study of the California Economy says Tesla has an enormous labor pool around San Jose to draw from.

Levy is convinced that Tesla can be successful and that the real test is whether consumers want to buy Tesla cars. So far, the indications are positive. Led by environmentally conscious Californians, 400,000 people have deposited $1,000 with Tesla to get on the waiting list for the Model 3.

Musk has found a kindred spirit in President Donald Trump on the importance of manufacturing. The South African-born entrepreneur, who also heads SpaceX, is a member of the new president’s business advisory council.

As to Fremont, city officials emphasize the city’s resilience and manufacturing heritage. In addition to cars and solar panels, Apple’s early Macintosh computers were manufactured in Fremont.