Tesla will deliver the first 30 Model Y cars to customers on Tuesday at its 5 billion euro ($5.5 billion) Gruenheide factory, marking the company’s first European production base and the largest investment in a German car factory in recent history.
Elon Musk, the company’s CEO, arrived in Berlin on Monday for the occasion, tweeting, “Excited to hand over the first Giga Berlin-Brandenburg production cars tomorrow!”
Tesla said the chosen customers will receive the Model Y Performance configuration, which costs 63,990 euros and has a range of 514 kilometers (320 miles). New orders from the plant might be fulfilled as early as April.
The ceremony, which Musk had thought would take place eight months ago, will be attended by German Chancellor Olaf Scholz. Despite this, local officials claimed it was completed relatively quickly.
On Tuesday, regional finance minister Joerg Steinbach said on rbb radio that “some people didn’t feel Germany could achieve this.” “We demonstrated to the rest of the world.”
Tesla announced on Tuesday that more than 3,000 of the plant’s projected 12,000 workers have been hired so far.
Due to the plant’s delay in being licensed, Tesla had to serve earlier European orders from its Shanghai manufacturing, which increased logistical expenses.
“Locating production within a continent makes a tremendous difference in capital efficiency,” Musk tweeted.
When fully operational, the factory would build 500,000 cars per year, far exceeding the 450,000 battery-electric vehicles sold globally by German rival Volkswagen in 2021. It will also produce 50 GWh of battery power, outperforming all other plants in Germany.
For the time being, Volkswagen still has a 25 percent market share in Europe’s electric vehicle market, compared to Tesla’s 13 percent. According to Musk, ramping up production will take longer than the two years it took to construct the factory.
According to JPMorgan, Gruenheide would produce 54,000 cars in 2022, 280,000 in 2023, and 500,000 by 2025.
Volkswagen is planning a new 2 billion euro EV facility beside its Wolfsburg manufacturing and six battery plants around Europe, after receiving 95,000 EV orders in Europe this year.
However, its schedule lags behind Tesla’s, with the first electric vehicle factory set to debut in 2026 and the first battery plant in 2023.
On March 4, municipal authorities gave Tesla the green light to begin production, subject to a number of conditions, including water usage and air pollution control.
When local environmental groups filed a protest against the environmental ministry, disputing the license it provided to Tesla’s water supplier, the manufacturer was on the verge of losing its water supply contract.
