Tesla to expand German EV plant near Berlin, aims for Europe’s largest vehicle factory

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Tesla to expand German EV plant near Berlin, aims for Europe’s largest vehicle factory
Credit: © Reuters.

Tesla (NASDAQ: TSLA ) aims to boost the production capacity of its assembly plant located outside Berlin to an impressive one million electric vehicles annually. This strategic move positions the EV giant to become the largest car plant in Europe, coinciding with a period in which German automakers are facing challenges in keeping up with the transition to electric vehicles.

On Wednesday, thousands of pages of Tesla's expansion plans were made public, and if these plans receive approval from local officials, the production output of the plant will surpass that of Volkswagen's (ETR: VOWG_p ) factory in Wolfsburg.

Since March 2022, Tesla's German plant has been manufacturing approximately 5,000 Model Y SUVs a week. In its pursuit of growth, the company aims to enhance its capacity to produce additional models at the plant, although the specific models have not been disclosed yet. Notably, the expansion documents also reveal Tesla's plan to double its production of battery cells, reaching a storage capacity of 100 gigawatt hours per year.

During a town hall-style event held near the plant on Tuesday, Tesla informed residents that the number of employees at the German facility would increase significantly from the current 10,000 to 22,500. Tesla's website displays dozens of job openings, with the majority of them focused on manufacturing roles, indicating the company is still seeking to fill positions at the plant.

Dirk Schulze, the regional head of the IG Metall labor union, which represents 2.3 million workers nationwide, welcomed the announcement of more jobs in the economically vulnerable region. However, he also called for better working conditions for those on the job.

“Despite high levels of sick leave, staff are being cut on a significant scale,” Mr. Schulze said. “But production targets are not being adjusted downward, so pressure on the remaining colleagues is increasing.”

Since Tesla initially proposed the plant in 2019, it has faced opposition from local residents who are concerned about the potential strain on groundwater resources. The expansion plans include construction of a water treatment facility, enabling the factory to recycle water effectively, thereby reducing its reliance on additional water resources.

As part of the regulatory process, residents and organizations have one month to examine the plans and submit any concerns to authorities. A public hearing is to be held in October.

Shares of TSLA are down more than 4% in pre-market trading on Thursday.

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