Tesla’s Giga Factory in Germany – Set to Accelerate Pace of Global EV Disruption & Poses Serious Challenge for European Car Makers

  • Tesla has opened its first Gigafactory in Europe
  • German Chancellor Olaf Scholz and Economy Minister Robert Habeck attended opening ceremony
  • Tesla will deliver the first Model Y Performance cars built in Germany on Tuesday

On the outskirts of Berlin, Tesla has opened its first Gigafactory in Europe. The opening ceremony in Gruenheide, southeast of Berlin, was attended by German Chancellor Olaf Scholz and Economy Minister Robert Habeck. Elon Musk, the CEO of Tesla, was also present for the inauguration ceremony. The new Gigafactory will employ 12,000 people and produce 500,000 automobiles each year, according to the company.

The year 2021 was a watershed moment for Tesla. Electric cars have demonstrated strong growth in terms of viability and economics. In 2021, deliveries increased by 87 percent. According to Q4 2021 data, Tesla has registered its highest quarterly operating margin among all volume OEMs. Results are indicative of the fact that electric vehicles can be more profitable than gasoline-powered automobiles. Tesla generated $2.8 billion in free cash flow in the fourth quarter of 2021. In Q4, cash and cash equivalents totalled $17.6 billion, up $1.5 billion from the previous quarter.

In Q4-2021, Tesla achieved an annualised car manufacturing run-rate of nearly 1.22 million vehicles and delivered a record-breaking 0.94 million vehicles.

In Europe, Tesla is posing a threat to German automakers. Volkswagen has a bigger market share, but Tesla has emerged as a fierce competitor, setting the new rules of games for traditional Auto manufacturer. Tesla is delivering the first Model Y Performance cars built in Germany . The automobiles have a range of 514 kilometers (320 miles) and cost €63,990 (£53,000), according to the company.

The company wants to enhance its production capacity by ramping up production at new factories in Austin and Berlin, as well as maximising output at existing operations in Fremont and Shanghai. Tesla believes that its ability to increase capacity across the supply chain and ramp production will decide its competitiveness in the EV market.

Further Tesla is concentrating on FSD (Full Self-Driving) software which is one of the principal areas of focus. Tesla claims that its software-related profit will accelerate total profitability over time. FSD is a critical component in improving automobile safety while also accelerating the world’s shift to sustainable energy through increased vehicle utilisation.

Environmentalists have expressed concern that the facility will have an impact on the region’s drinking water supply. On March 4, municipal authorities gave Tesla permission to commence production, subject to a few stipulations. Local environmental groups have filed a protest with the Ministry of the Environment, questioning Tesla’s water supplier’s licence.

Bureau Galactik Views

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