Grunheide, Germany, March 22 – Elon Musk cheered as Tesla (TSLA.O) handed over its first German-made cars at its Grunhide plant on Tuesday, the opening of the US automaker’s inaugural European hub. Years after it was first announced.
Musk hands out the first 30 cars at a German plant
Playing loud music as 30 clients and their families got their first glimpse of their shiny new vehicles through the shiny, neon-lit Tesla brand tunnel, the Tesla chief executive danced and joked with the musk fans and cheered.
“It’s a good day for the factory,” Musk described it as “another step in the direction of a sustainable future.”
Musk said Tesla could launch a test version of its new “full self-driving” software in Europe, possibly depending on regulatory approval next year.
“It’s very difficult to fully self-drive in Europe,” he told factory workers on Tuesday, adding that much work needs to be done to manage tricky driving situations in Europe, where roads vary greatly from country to country.
German Chancellor Olaf Scholz, who participated in the event, praised the Gigafactory as the future of the car industry, but this was met with opposition and some environmental activists restricted access to the factory while displaying banners that flagged its excess water usage. Read more
Activists protested, blocking plant access, highways
The two protesters were absent from the motorway sign near the factory, blocking traffic for hours after the show.
Musk had hoped to start production from the factory eight months ago, but local concerns surrounding licensing delays and the environmental impact of the plant halted the process.
Tesla was forced to supply European orders from Shanghai while waiting for its German licence, which added to rising logistics costs while struggling with industry-wide chip shortages and other supply chain disruptions.
It received final approval from local authorities on March 4 to begin production in Germany, meeting conditions ranging from its water use to air pollution controls.
The plant was opened on the same day that a top US securities regulator urged federal judges not to back out of a deal requiring Musk to monitor his Twitter use.
Tesla Gigafactory at Grunheide
Tesla will hand over the first cars produced at the new plant in Grunheide
German Chancellor Olaf Scholz and Elon Musk attended the inauguration of the new Tesla Gigafactory for electric cars on
Tesla shares surged 7.9% to a two-month high on Tuesday.
Race with VW
New orders from the plant will be delivered by April
The new owner received the Model Y Performance configuration, a 514 km (320 miles) range with a vehicle price of 63,990 euros ($ 70,500), Tesla said, and new orders could be delivered from the plant by April.
Workers on site up to..
About 3,500 of the plant’s expected 12,000 workers have been hired so far, Tesla said.
At full capacity, the plant produces 500,000 cars a year, more than the 450,000 battery-electric vehicles sold by German rival Volkswagen (VOWG_p.DE) globally in 2021.
It will eventually generate 50 gigawatt hours (GWh) of battery power, surpassing all other plants in Germany. Tesla is expected to import batteries from China initially for its German-made Model Ys before launching local battery production.
Musk said Tuesday that battery production will be “challenging” next year and that it will be a “limiting factor” in the coming years, as Tesla aims to aggressively increase vehicle production.
Currently, Volkswagen is still on track to electrify Europe’s fleet, with Tesla’s 13% to 25% market share. Musk said increasing production would take longer than the two years it took to build the plant.
JPMorgan Grunhide predicts it will produce about 54,000 cars by 2022, 280,000 by 2023 and 500,000 by 2025.
Volkswagen, which received 95,000 EV orders in Europe this year, is planning a new 2 billion Euro EV factory with its existing facility in Wolfsburg and six battery plants across Europe.
But its timeline lags behind Tesla, with the EV factory set to open in 2026 and the first battery plant in 2023.
Credited Victoria Waldersey, Nadine Skimrozzyk, Additional Report by Hyunju Jin; Edited by Alexander Smith, John Harvey and Richard Pullin with Drivepilots.