Tesla is planning to double the production capacity of its assembly plant near Berlin to reach one million electric vehicles annually. This ambitious move would establish the plant as the largest car manufacturing facility in Europe, and it comes at a time when German automakers are struggling to keep up with the transition to electric vehicles.
Since its inception in Grünheide 16 months ago, Tesla has had a significant impact on the German automobile industry, even surpassing Volkswagen in electric vehicle sales during the first half of this year.
The expansion plans, which were made public on Wednesday, will only proceed if they receive approval from local officials. If given the green light, the plant’s output will surpass that of Volkswagen’s iconic factory in Wolfsburg, which has been Europe’s largest car plant since its establishment in the 1930s, producing 815,000 cars annually.
German automakers like Volkswagen, BMW, and Mercedes-Benz have struggled for years to produce electric vehicles that can effectively compete with Tesla in terms of price and popularity. However, the demand for electric vehicles continues to rise. In June, new registrations of electric cars in Europe increased by over 66%, surpassing the sales of diesel cars for the first time, according to the European Automobile Manufacturers’ Association.
Tesla’s German plant has been producing approximately 5,000 Model Y sport utility vehicles every week since March 2022. However, this is only about half of its current capacity, which is still scaling up. The company aims to expand its production capacity to accommodate other models, although specifics have not been disclosed. Additionally, Tesla plans to double its production of battery cells, reaching a storage capacity of 100 gigawatt hours per year, based on the expansion documents.
The number of employees at the German plant is expected to increase from 10,000 to 22,500, according to a town hall-style event held by Tesla near the plant. The company is currently advertising dozens of job openings, primarily in manufacturing.
While this announcement of additional jobs has been welcomed in the economically weak region, Dirk Schulze, the regional head of the IG Metall labor union, has called for improved working conditions for the current employees. He highlights concerns about the significant staff cuts despite high levels of sick leave and increasing pressure on the remaining colleagues. IG Metall has been unsuccessful in securing a collective-bargaining agreement for the plant’s employees, partly due to Tesla CEO Elon Musk’s staunch opposition to unions.
Local residents and organizations have one month to review the expansion plans and raise any concerns with the authorities. A public hearing is scheduled for October.
Tesla has faced opposition from area residents since the initial proposal for the plant in 2019, primarily due to concerns about its impact on groundwater. However, the expansion plans include the construction of a water treatment facility that would enable water recycling, reducing the need for additional resources.
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