Tesla Coming to Germany

The first 100,000 Tesla EVs that are made in Germany are scheduled to roll out of the American company’s new “Gigafactory Europe“ in Brandenburg by July 2021. So what was behind CEO Elon Musk’s decision to start manufacturing in the eastern German state of Brandenburg, just outside Berlin?

June, 2020

When Elon Musk, the charismatic and often iconoclastic boss of U.S. electric vehicle manufacturer Tesla, announced last year at an award ceremony in Berlin that he was planning to open his fourth “Gigafactory” in Germany, the audience gasped. Was this a foreign investment triumph for Germany? Or an outside challenge to Germany’s world-famous auto industry?

One commentator at Handelsblatt, Germany’s leading business newspaper, wrote: “The Germans slept through the first round of e-mobility, so they’re now entering this market with even greater determination. Musk knows that if he wants to remain at the forefront of e-mobility during the second round, he needs to be where the most significant progress will be made.”

Tesla paid EUR 41 million for the 300-hectare site in Grünheide, where it will  build its next Gigafactory.

© Hans Christian Plambeck/laif

Tesla had been looking to locate a factory in Europe since 2017, and the company had already gained a foothold in Germany, hiring engineers away from Audi and acquiring German engineering company Grohmann to help automate their manufacturing. “That’s part of the reason why we’re locating our Gigafactory Europe in Germany,” Musk explained in Berlin. “Everyone knows that German engineering is outstanding.”

Tesla’s factory will be built in Grünheide, Brandenburg. Reports suggest the company paid EUR 41 million for the 300-hectare site, where work on the EUR 4 billion project has begun. Tesla ultimately plans to be making half a million cars here a year. If the company’s ambitious schedule is met, the first 100,000 will roll off the assembly line next July.

Tesla is currently Germany’s most popular brand of EV and proximity to new customers undoubtedly played a role in the decision to invest in the country. Musk also said the fact that the site was a 25-minute drive from Berlin, one of Europe’s most exciting cities and a hub for innovative start-ups and software design, was a major factor.

The Tesla site will be close to the new Berlin-Brandenburg airport, railway lines and several universities and research institutions. “That kind of constellation [of amenities] is like gold dust,” enthuses Brandenburg Minister for Economic Affairs Jörg Steinbach.