Key Points
- Tesla seeks to expand its factory near Berlin to double production capacity, potentially making it Germany’s largest auto manufacturing facility.
- Approval pending for the expansion, subject to an environmental impact study and potential objections from local residents.
On Monday, July 17, WSJ reported that Tesla is set to expand its factory near Berlin in an effort to double its production capacity and potentially become Germany’s largest auto manufacturing facility. The company has submitted documents to local officials, seeking approval to increase production capacity for both vehicles and batteries at its existing plant in Brandenburg. While some changes have received tentative approval, full approval is pending the completion of an environmental impact study, which will involve input from local citizens. Tesla’s application will be made available online for public scrutiny, and a public hearing may be held in October to address any concerns.
Environmental groups previously opposed Tesla’s construction of the factory due to potential effects on local forests, wildlife, and water sources. Similar resistance could be expected for this new expansion application. Tesla began manufacturing its Model Y at the Berlin plant in early 2022, and the all-electric SUV became the top-selling vehicle in Europe in the first quarter of this year. Tesla’s production capacity at the plant has reportedly reached 5,000 vehicles per day. Although Tesla still lags behind major German auto brands in overall sales, its Model Y and Model 3 were the best-selling all-electric vehicles in Europe during the first quarter of this year, surpassing Volkswagen’s ID.3 and ID.4 models.
In the European market, Tesla has seen significant sales growth. In the first five months of 2023, the company sold 138,294 new cars in the European Union, its free trade association partners, and the U.K., resulting in a 2.6% share of total new vehicle sales in the region. This places Tesla ahead of established manufacturers like Nissan and Volvo. While the European market for electric vehicles has experienced some slowdown, sales growth remains strong. All-electric vehicle sales in the EU, EFTA, and the U.K. rose by 42.3% to 730,137 vehicles in the first five months of this year. Battery electric vehicles accounted for nearly 14% of new car sales in May.
Germany’s IG Metall labor union has expressed support for the additional job opportunities that the expansion could bring to Tesla’s Grünheide plant. However, the union also noted that the company has recently laid off some regular employees and contract workers. Dirk Schulze, IG Metall’s district manager for Berlin, Brandenburg, and Saxony, stated that nearly 200 regular employees were laid off or signed severance agreements in the previous month. It’s worth mentioning that Tesla’s Grünheide plant is not currently unionized, although IG Metall maintains an office nearby and engages with Tesla’s workforce.
About Tesla
Tesla, Inc. (NASDAQ: TSLA) designs, develops, manufactures, sells and leases fully electric vehicles and energy generation and storage systems, and offer services related to its products. The Company’s automotive segment includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits. Additionally, the automotive segment is also comprised of services and other, which includes non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, sales by its acquired subsidiaries to third party customers, and vehicle insurance. Its energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its automotive products include Model 3, Model Y, Model S and Model X. Powerwall and Megapack are its lithium-ion battery energy storage products. To learn more, visit www.tesla.com
