Tesla may build next manufacturing plant in Berlin: Elon Musk

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Elon Mush, CEO Tesla Inc., sent a casual warning to all the leading German Automobile Manufacturers that Tesla Motors is coming on their territory to give them some fierce competition. Musk said that the company’s next production unit could be built near Berlin, Germany. 

On Tuesday Musk said that Tesla will also institute a design and engineering centre near the Berlin airport. He announced this while he was in Germany to accept the award of Tesla’s Model 3 sedan which beat the likes of Audi’s A4, and BMW’s 3 series in the category of middle/upper vehicles.

At the event Musk said ‘Some of the best cars in the world are obviously made in Germany’ in the presence of some of the of the world’s best car automakers CEOs like, BMW AG, Audi AG, and Volkswagen AG. He said that Germany is ‘not far behind’ in electric car market, however pointing out that the market is still ‘unproven’.

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It is said that Musk as the company is finalising its commencement of electric cars built in Shanghai he is laying the groundwork to enter into European Market extensively by building a manufacturing unit in Berlin. It does not take a lot understanding to notice that if Tesla does this, the automakers who are already looking at some serious competition from electric cars will increase drastically. However the only sigh of relief for these companies is that Tesla’s unit will not be ready for operations until 2021.

Though Germany’s e-car market shows promise, the process of shifting from cars running on internal combustion engines to batteries will be no easy feat for the government. Daimler AG, owner of Mercedes-Benz is trying to resolve the issue of labour union resistance on where the electric cars will be manufactured right before a meeting with the investors which is said to be vital for the company. Additionally, Audi AG, which is the most profitable venture of Volkswagen Group, is facing similar issues wherein they are trying to find a way to assure that employment will not be affected at the factories once company starts pushing towards electric cars.

As we know company have specialised people working solely on Engines and it’s architecture to increase performance, life, and fuel efficiency but in electric cars this will not be required to a great extent, along with many other departments which could see potential layoff of workforce.

Chancellor of Germany, Angela Merkel along with various local automakers have come to an agreement wherein people buying and producing Electric Vehicles (EVs) will be given some incentives, this will thus help Germany in intensifying their move towards reducing exhaust emissions. Germany will be facing some major challenges in doing this shift as it has one of the highest energy and labour cost globally. Additionally, as Tesla excels at their EV technology, they lack at dealer and maintenance centres’ network, this will be a major setback for the company which the local manufacturers most likely will not face.

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According to the note shared by Morgan Stanley’s analysts, Germany is the ‘logical choice’ for the electric car manufacturer (Tesla) to set up their megafactory, led by Adam Jonas. Jonas added ‘Germany is the heart of the global luxury-auto market, with an economy dependent on internal-combustion tech and a government focused on climate change’.

Soon after Tesla Modle 3 was awarded or being the best car in middle/upper class, he shared the news with his 29 million Twitter followers saying ‘Congrats to Tesla team on Model 3 winning best midsize car in Germany!’ with three German Flag emoticons.

Yesterday, Tesla share prices jumped to almost $350 showing a growth of around 1.4%, this is the highest closing price the company has seen since December 2018. Additionally, the company’s share prices has seen a growth of almost 37% since October 23, 2019, when the company reported a profit of $ 143 million slamming the street claim of incurring losses of over $250 million.

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