The first Model Y automobiles built at Tesla’s 5 billion euro ($5.5 billion) Gruenheide plant will be delivered to customers on Tuesday, marking the company’s first European manufacturing base and the largest investment in a German automotive factory in recent history.
The ceremony, which will be attended by German Chancellor Olaf Scholz and Tesla CEO Elon Musk, will mark a moment Musk had thought would happen eight months ago but, according to local officials, has come relatively swiftly for a project of this size. Musk has announced Master Plan Part 3 for Tesla, which he claims would chart out the company’s scaling to “extreme size.”
The German gigafactory and adjacent battery plant, which will employ 12,000 people, will become the largest employer in the German state of Brandenburg, where it is located. It will build 500,000 cars per year at full capacity, more than the 450,000 battery-electric vehicles sold globally by primary competitor Volkswagen (VOWG p.DE) in 2021, and generate 50 gigawatt hours (GWh) of battery power, outpacing all other plants in the country.
Volkswagen currently has a 25 percent market share in Europe’s electric vehicle market, compared to Tesla’s 13 percent. Musk has warned that ramping up production will take longer than the plant’s two-year construction period.
find out more According to JPMorgan, Gruenheide would produce 54,000 cars in 2022, 280,000 in 2023, and 500,000 by 2025.
Volkswagen is planning a new 2 billion euro EV facility beside its Wolfsburg manufacturing and six battery plants across Europe, after receiving orders for 95,000 battery electric vehicles in Europe this year. However, its schedule lags behind Tesla’s, with the first electric vehicle factory set to debut in 2026 and the first battery plant in 2023.
On March 4, municipal authorities gave Tesla the green light to begin production, subject to a number of conditions, including water use and pollution management. Local environmental groups filed a protest against the environmental ministry, questioning the license it provided to Tesla’s water supplier, and the manufacturer came dangerously close to losing its water supply contract.
The court eventually decided that water extraction may go ahead as long as the ministry held a new public consultation. The ruling may be appealed by environmental groups. Even if they don’t, citizen initiatives have stated that they will resist Tesla’s planned expansion, citing issues such as light pollution and water scarcity.