Currently reading: Tesla to build first European factory in Germany
Plans to set up in UK scratched as Elon Musk announces Berlin-based manufacturing, engineering and battery site
Jim Holder
News
2 mins read
13 November 2019

Tesla will build its first European factory in Berlin, Germany, boss Elon Musk has confirmed.

The facility will include an engineering and design centre and will be used to manufacture cars, batteries and powertrains. The first car to be built there will be the upcoming Model Y small SUV, according to Musk.

"Everyone knows that German engineering is outstanding, and that's part of the reason we are locating our Gigafactory Europe in Germany," he said.

Tesla has previously said its European factory would open in 2021, although Musk is known for announcing optimistic dates for building facilities from scratch.

The announcement dashes hopes that the facility could be constructed in Britain, something Musk had previously suggested was likely.

In 2016, prior to the Brexit vote, he said: “We have a lot of respect for the British automotive engineering talent. Just look at Formula 1: it amazes me how much British talent there is in that. We're likely to establish a Tesla engineering group in Britain at some point in the future.”

Tesla faces increasing competition from established car makers but is now on-track to open new Gigafactories in China and Europe, adding to its established US operations to give it a global manufacturing base.

At present, 16 lithium ion battery cell plants are confirmed or due to begin operations in Europe by 2023, underlining the level of competition that Tesla faces in future.

Musk made his announcement while he was on stage at an awards ceremony with Volkswagen Group boss Herbert Diess. When asked why other car makers were lagging in the race to build electric cars, Musk said: "I don't think Germany is that far behind." Volkswagen will launch the ID 3 next year and has set the goal of selling more than one million electric cars across 20 electric model lines by 2025.

Tesla has yet to record a full-year annual profit, but it has posted positive quarterly results in the past 12 months. In order to boost profitability, it has undergone a significant cost-cutting project in 2019, both improving its production processes and cutting jobs.

Read more:

Analysis: Tesla making progress but still faces challenges

Tesla Model Y revealed

Tesla Model 3 Performance 2019 review

New Tesla Roadster has first European showing at Grand Basel

Tesla Model 3 becomes EV with longest range in Europe

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30

13 November 2019

  Brexit, no matter what your point of view, the plonked death throws are damaging the UK as a place to set up businesses,mind you, this is Elon Musk we're talking about here, he could change his mind..

13 November 2019

The UK is an expensive place to do business, with or without Brexit. Engineering ideas do not suffer export or customs restrictions, so the Brexit effect has nothing to do with this decision. I would think he already decided that quality was the criteria and Germany was the place to deliver. Just look at the reliablility figures for UK made vehicles and it is still pretty awful. Changing ownership of JLR to Indian did not change the quality of the finished product as they have been consisitanly bad in reliability through independence, BL, Ford and now Tata. While people generally proclaim Japanese vehicles as being the most reliable, not when they are manufactured in the UK. Such a shame that this blight has never been eradicated by any maker.

13 November 2019
Peter Cavellini wrote:

  Brexit, no matter what your point of view, the lingering death throws are damaging the UK as a place to set up businesses,mind you, this is Elon Musk we're talking about here, he could change his mind..

13 November 2019

It might be a decision he rues one day. Germany is horrendously expensive place to operate. I would have thought he would build in Hungary or Slovakia to get the costs down, while research or engineering could be in any of the other Euro countries.

13 November 2019
john386 wrote:

It might be a decision he rues one day. Germany is horrendously expensive place to operate. I would have thought he would build in Hungary or Slovakia to get the costs down, while research or engineering could be in any of the other Euro countries.

Hence why he chose Germany. A no brainier from Elon’s point of view.

13 November 2019

Thats a shame.

 

13 November 2019

What rubbish and I hope this is the last political post on Autocar, there's enough elsewhere.  As to German engineering, he obviously hasn't seen BMW's latest reliability results.

13 November 2019
xxxx wrote:

What rubbish and I hope this is the last political post on Autocar, there's enough elsewhere.  As to German engineering, he obviously hasn't seen BMW's latest reliability results.

 

Car making is interwoven with politics.

From industrial unrest in the 70s, to Thatcher welcoming Nissan to Sunderland, to the current slow death happening now, you can't escape it.

Political decisions (and votes) have consequences.

13 November 2019

Musk was never going to build here.

13 November 2019

"Everyone knows that German engineering is outstanding "?!?! What planet is he on? We had a VW Transporter from new that needed a new engine after 4years/60k, prior to which it would intermittently fail to start. The VW garage couldn't find a fault. We have a 20,000 mile UP that intermittently loses power and has the engine management light and catalytic converter light on. Guess what? The VW garage can't find a fault, so we are left with a car that drives like it is running on 2 cylinders. You can keep your German 'engineering'.

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