On Tuesday, Elon Musk officially opened Tesla’s first manufacturing facility in Europe, as the company seeks to relieve pressure on its other factories in the United States and China. Musk was seen dancing as he presided over the delivery of Tesla’s first German-made vehicles to 30 clients and their families at the carmaker’s 5 billion euro ($5.5 billion) plant in Germany.
According to Reuters, Musk said, “This is a great day for the factory,” before praising the launch as “another step in the direction of a sustainable future.” The Tesla CEO reminisced about the company’s Shanghai factory opening in January 2020, during which he also demonstrated some of his dance moves.
Musk is expected to cut a red ribbon at the new Giga Berlin (or Gigafactory Berlin-Brandenburg) factory in Grünheide, a coal town in Brandenburg, Germany, close to the capital.
Giga Berlin does not have universal support. According to Reuters, several protesters gathered outside the facility on Tuesday to voice their concerns. They are concerned that the plant will consume too much water, and they are dissatisfied with the number of trees sacrificed to build it.
Tesla expects the Berlin factory to produce up to 500,000 vehicles per year. According to the German publication Auto Motor Und Sport, the Tesla plant is aiming to produce 2,000 vehicles in its first few weeks of serial production.
According to Troy Teslike, an independent Tesla researcher, the company expects vehicle output to reach 1,000 per week six weeks after commercial production begins, and 5,000 per week by the end of 2022.
The American EV manufacturer has been struggling to meet demand, and there are reportedly lengthy delays for Model Ys and certain Model 3s in various parts of the world.
Tesla had to temporarily shut down production at its Shanghai plant last week due to a resurgence of Covid-19 cases in China. For at least two days, production of Model 3 and Model Y vehicles made in China was halted.
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Demand for EVs remains high in Europe, and Tesla can now rely on some production on the continent rather than relying solely on shipments from China.
Giga Berlin has been in the works for several years. It is critical to Tesla’s global expansion plans following the late-2019 opening of its Gigafactory 3 plant in Shanghai. Tesla has also recently begun production for the Model Y at another plant in Austin, Texas, but the site has yet to be officially opened.
“Everyone knows that German engineering is unrivaled,” he said. That is one of the reasons we chose Germany as the location for our Gigafactory Europe. We will also establish an engineering and design center in Berlin, as the city has some of the best art in the world.”
Following months of delays, the conditional license for the vehicle and battery plants in Brandenburg was expected. Tesla had planned to begin vehicle production in early summer 2021, but the Covid pandemic, supply chain issues, and clashes with environmentalists slowed its progress.
While the plant is operational, water usage at the facility remains a concern.
“The impact on the local water supply remains a concern for the plant’s future,” Deutsche Bank autos sector analysts wrote in a research note Monday. They also stated that in order to truly ramp up volume, Tesla will need to provide evidence of appropriate water usage and air pollution control.
“All the sources had indicated that the company may completely exhaust the region’s water reserve with the first stage of the plant build-out, and will also require additional extraction permits in order to expand its maximum capacity any further in the future,” as per the note.
“As a result, Tesla is expected to have enough supply to meet the initial 500,000 volume target, but it may face additional challenges as it plans to expand each of its Gigafactories to 1 million units of annual production.”
Musk began dancing to thumping dance music as he handed over the keys to the factory’s first production cars.
The audience applauded as he recalled a similar scenario at the opening of the Shanghai factory in 2020.