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February 21, 2024

Tesla hopes to double the capacity of its assembly plant outside Berlin to 1 million electric vehicles a year, a move that would make it the largest car factory in Europe as German automakers struggle to keep pace with the transition to electric vehicles.

Tesla has upended the German automotive landscape since it started production in Grünheide 16 months ago. In the first half of this year, it outsold Volkswagen for the first time in electric car sales.

If the expansion plan, published in thousands of pages of details on Wednesday, is approved by local officials, the plant will outstrip Volkswagen’s iconic factory in Wolfsburg. Built in the 1930s, the factory is still the largest in Europe, capable of producing 815,000 vehicles per year.

Volkswagen and other German automakers, including BMW and Mercedes-Benz, have been groping for years to produce electric vehicles that could compete with Tesla on price and popularity. New registrations of electric cars across the continent rose more than 66% year-on-year in June, outselling diesel cars for the first time, according to the European Automobile Manufacturers Association.

Since March 2022, Tesla’s German factory has been producing about 5,000 Model Y sport utility vehicles per week, a rate roughly half its current capacity, which is still ramping up. The company said it wanted to increase the plant’s capacity to make other models, but did not specify which ones. The company also seeks to double battery production and reach 100 gigawatt-hours of storage capacity per year, expansion documents show.

On Tuesday, the company told residents at a town hall-style event near the factory that the number of employees would increase to 22,500 from the current 10,000. Dozens of job openings, mostly in manufacturing, have been advertised on the company’s website, suggesting there are still vacancies at the company’s current factories.

Dirk Schulze, the regional head of the IG Metall union, which employs 2.3 million workers across the country, welcomed the announcement of job gains in economically weak regions. But he called for better working conditions for staff.

“Despite the high number of sick days, there is a massive layoff of staff,” Mr Schultz said. “But production targets have not been revised down, so the pressure on remaining colleagues is mounting.”

IG Metall has been frustrated by its inability to attract enough workers to create a collective bargaining agreement for factory workers. Tesla CEO Elon Musk has been outspoken against unions.

Local residents and organizations have one month to check the plans and submit any concerns to authorities. Public hearings will be held in October.

Tesla has encountered resistance from residents of the area since plans for the factory were first proposed in 2019; they fear the existing factory will drain groundwater. The expansion plans include building water treatment facilities, which will allow the plant to recycle water rather than expand resource use.



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