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Tesla CEO Elon Musk opens an electric car factory


SpaceX founder and Tesla CEO Elon Musk looks to be visiting the construction site of Tesla’s gigafactory in Gruenheide, near Berlin, Germany, May 17, 2021.

Michele Tantussi | Reuters

Elon Musk will officially open Tesla’s its first production facility in Europe on Tuesday as the company seeks to take pressure off other plants in the US and China.

The Tesla CEO will cut the red ribbon at the new Giga Berlin (or Gigafactory Berlin-Brandenburg) in Grünheide, a coal town in Brandenburg, Germany, within commuting distance of the capital.

Tesla reckons the Berlin factory makes up to 500,000 cars a year.

Tesla has struggled to keep up with demand, and there have been reports of lengthy delays for the Model Y and certain Model 3s in different parts of the world.

Last week, Tesla had to temporarily close production at its Shanghai factory due to the resurgence of Covid-19 cases in China. Limited production of Model 3 and Model Y vehicles made in China there for at least two days.

In recent quarters, Tesla has been exporting cars from China to customers in Europe.

Demand for electric vehicles remains very strong in Europe, and Tesla can now rely on some of its production in the continent, rather than just being shipped from China.

Giga Berlin has been several years in the making. It’s critically important to Tesla’s global expansion plans later opening Gigafactory 3 in Shanghai at the end of 2019. The company also opened another plant in Austin, Texas, recently.

In November 2019, when Musk announced plans to build a car factory in Germanyhe praised German engineering.

He said: “Everybody knows that German engineering is excellent. That is part of the reason why we located our Gigafactory Europe in Germany. We will also establish a technical and equipment center. design in Berlin, because Berlin has some of the best art in the world.”

German authorities have given Tesla conditional approval to begin production on March 4.

Conditional permits for vehicles and battery plants in Brandenburg were expected after months of delays. Tesla had planned to start car production in early summer 2021, but Covid pandemicsupply chain complexity and conflicts with environmentalists have slowed its progress.

Thirsty factory?

While the plant is up and running, water use at the facility remains an issue.

“The impact on local water supplies continues to be a concern for the future of the plant,” said Deutsche Banke automotive analysts. They added that Tesla would need to provide evidence of proper water use and air pollution control to actually increase production.

“Sources indicate that the company could completely deplete water reserves in the region once the first phase of the plant is built and that additional mining permits will be needed to expand capacity further in the future. “, the note said.

“As such, Tesla is expected to have enough supply to support its initial 500,000 production target, but may face additional obstacles as it plans to expand each of its Gigafactories to ~1 million units produced annually.”

—Additional reporting by CNBC’s Lora Kolodny.



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