SpaceX founder and Tesla CEO Elon Musk will visit the construction site of Tesla’s Gigafactory on May 17, 2021 in Grünheide, near Berlin, Germany.
Michele Tantussi | Reuters
Elon Musk will officially open Tesla’s first manufacturing facility in Europe on Tuesday. The company aims to relieve pressure from other factories in the United States and China.
Tesla’s CEO cuts a red ribbon at the new Gigafactory (or Gigafactory Berlin-Brandenburg) plant in Grünheide, a coal town in Brandenburg, Germany, within commuting distance of the capital.
Tesla estimates that its Berlin plant produces up to 500,000 vehicles annually.
Tesla is struggling to keep up with demand, with long delays between Model Y and certain Model 3 reported in different parts of the world.
Last week, Tesla had to temporarily suspend production at its Shanghai plant due to the resurgence of Covid-19 cases in China. Production of Chinese Model 3 and Model Y vehicles was limited to at least two days.
In recent quarters, Tesla has been exporting cars from China to European customers.
Demand for EVs remains very high in Europe, and now Tesla can rely on continental production as well as shipments from China.
Giga Berlin has been around for several years. Tesla is critical to planning to expand its business globally after opening the Gigafactory 3 factory in Shanghai in late 2019. The company recently opened another factory in Austin, Texas.
In November 2019, when Musk announced plans to build an automobile factory in Germany, he praised German engineering.
He states: “Everyone knows that German engineering is good. That’s one of the reasons why Gigafactory Europe is located in Germany. We also plan to set up an engineering and design center in Berlin. The best art. ”
German authorities have conditionally approved Tesla to start production on March 4.
Conditional licenses for Brandenburg’s vehicle and battery factories were expected after a few months delay. Tesla was expected to start producing vehicles by early summer 2021, but progress slowed due to Covid’s pandemic, supply chain complexity, and clashes with environmentalists.
A thirsty factory?
Water usage at the facility remains an issue while the plant is in operation.
“The impact on local water supply remains a concern for the future of the plant,” Deutsche Bank’s automotive sector analyst said in a survey note on Monday. They added that Tesla needs to provide evidence of proper water use and air pollution control in order to truly increase its volume.
“According to sources, the company has the potential to completely exhaust the water reserves in the area as the first phase of the plant is built, and additional extraction permits are needed to further expand its capacity in the future. It will be. “
“Therefore, Tesla is reported to have enough supply to support its initial 500,000 unit target, but it is an additional hurdle as it plans to expand each Gigafactory to an annual production of 1 million units. You may face. “
— Additional report by Lora Kolodny on CNBC.