Tesla’s $5.5 billion Gigafactory in Grüheide, Germany, the company’s first manufacturing location in Europe and its “most advanced, sustainable, and efficient facility yet”, launched by Tesla founder Elon Musk with the attendance of German Chancellor Olaf Scholz, German Economy Minister Robert Habeck and Scholz' party friend Brandenburg Prime Minister Dietmar Woidke.
The opening comes as Musk has flagged Master Plan Part 3 for Tesla, which he said will map out scaling Tesla to "extreme size". The first electric vehicles, 30 Model Ys to be exact, manufactured in the Gigafactory are also handed over to their owners with a little performance by Musk himself.
Tesla began construction work on the construction of the car and battery factory, at the site in May 2020, on preliminary permits, while receiving a final permit was not guaranteed by German officials.
While the Gigafactory was meant to be operational last year, the opening was delayed after Tesla added a battery facility to its building plans. The Gigafactory’s final permits came through in early March.
When the plant was greenlit, just 2,600 of the 12,000 vacancies were filled. There are still hundreds of jobs open at the Gigafactory.
Now that the factory is open, Tesla hopes to produce roughly 30,000 vehicles in the first six months, with a goal of manufacturing nearly 500,000 cars per year in the future. Gigafactory also aims to generate 50-gigawatt hours (GWh) of battery power, surpassing all other plants in Germany.
The new leader of the European electric vehicle market emerges
As of now, Volkswagen has the largest share in the electric vehicle market in Europe with a 25 percent market size, compared to 13 percent of Tesla.
Volkswagen has received 95,000 electric vehicle orders in Europe this year, is planning a new 2 billion euro electric vehicle plant in 2026 and six battery plants across Europe in 2023.
Investment banking company JPMorgan predicts that Tesla's Gigafactory would produce around 54,000 cars in 2022, increasing to 280,000 in 2023 and finally 500,000 by 2025.
The largest investment in the area
Brandenburg Prime Minister Dietmar Woidke must be proud, as several large settlements have failed in Brandenburg in recent years. Failed investments in Brandenburg involve companies such as Cargolifter, which once wanted to build airships in the Dahme-Spreewald and create 500 jobs. But the company ceased its operations in 2002.
"All of a sudden, Brandenburg is one of the most important automotive locations in Germany," says Steffen Kammradt, Managing Director of Brandenburg Economic Development. The state-owned agency advises companies and investors looking to establish themselves in the state. Kammradt points out a real boost in investment inquiries since Musk decided on Brandenburg. According to Kammradt, this is "Tesla magic".
When the Gigafactory starts full production a new chapter in the global race to dominate the electric car market will begin, as the competition moves to Europe.
The company added Germany to its four fully-operational facilities—three in the US, and one in China.
Tesla’s Gigafactory is the largest industrial settlement in East Germany since Germany reunified.