Tesla shares (TSLA) closed slightly lower on Monday as the electric vehicle maker said Giga Berlin could build its long-awaited low-cost electric vehicle, while Tesla workers in Germany may get a raise as union pressure mounts .
As first reported by Portal, Tesla plans to build its 25,000 euro ($26,838) mainstream electric vehicle on the upcoming Gen 3 platform at Giga Berlin. CEO Elon Musk announced these plans while visiting the Giga factory in Berlin on Friday after traveling to the UK for an AI summit.
However, the Portal source declined to say when production would begin, and other sources said Tesla was close to developing manufacturing technology that would allow almost the entire underbody of the car to be printed in one piece ( or to mold), which would increase the speed of increasing production and reducing costs.
Musk has said in the past that manufacturing breakthroughs and rethinking how a facility is designed would allow Tesla to produce electric vehicles more cost-effectively. Most recently, he warned that high interest rates are making electric vehicles unaffordable and that this is a major obstacle to the company’s growth (as opposed to demand).
“I’m concerned about the high interest rate environment that we’re in,” Musk said during Tesla’s recent earnings conference call, adding, “I just can’t emphasize enough how important cost is… That’s why we need our products.” make it more affordable.” People can buy [them].”
Investors have been waiting to learn more about Tesla’s cheaper upcoming Gen 3 platform and models based on it after the company failed to provide further details at its investor day in March.
The 25,000 euro car almost didn’t come to fruition, says Walter Isaacson’s new biography of Elon Musk. According to Isaacson, Musk was more interested in building a cheap “robotaxi,” a car without pedals or a steering wheel that would drive autonomously, than a cheaper electric vehicle.
Musk’s bosses, including Chief Design Officer Franz von Holzhausen, are said to have convinced Musk that a cheap, low-cost global electric vehicle was needed to achieve Tesla’s 50% compound annual growth rate, and that the company wanted both the cheap electric vehicle and the robotaxi could be built on the same platform, thereby reducing costs. Isaacson wrote that Musk appeared to agree to the compromise when he saw design reviews of both vehicles that included Cybertruck-like cues.
The story goes on
Trade union pressure at Giga Berlin
Employees of the Tesla Gigafactory Berlin Brandenburg work on the final inspection of the finished Model Y electric vehicles on March 29, 2023 in Brandenburg, Grünheide. (Patrick Pleul/Picture Alliance via Getty Images) (Picture Alliance via Getty Images)
They held on to Tesla’s Berlin factory and apparently received a wage increase due to strong union pressure.
Tesla executives announced a 4% wage increase for workers at Giga Berlin during Musk’s visit to the factory, the Wall Street Journal reported Sunday.
The powerful German union IG Metall, which represents auto workers in the country, has tried to organize workers at Giga Berlin and force Tesla to agree to a union contract. So far, Tesla has not agreed to accept a union contract. According to the Journal, Tesla is the only major automaker in Europe without union representation on the factory floor.
The news in Germany follows successes by the United Auto Workers (UAW) in the US and comments from UAW President Shawn Fain that Tesla is the union’s next target.
At least in Germany, Tesla said its wage increases were not tied to union organizing efforts. “Claims that there is a connection between Tesla’s salary adjustments and union activity are untrue,” Tesla said.
“If you compare annual wages, there is a big gap between Tesla and our union employees at Porsche, BMW, Audi, VW, Daimler and Ford,” said IG Metall regional director Dirk Schulze.
Tesla’s EU press office and IG Metall did not immediately respond to a request for further comment on the wage increases at Giga Berlin.
Correction: An earlier version of this article incorrectly quoted the author of a new biography of Elon Musk. We regret the error.
Pras Subramanian is a reporter for Yahoo Finance. You can keep following him Twitter and on Instagram.
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