New reports have suggested that Tesla has high expectations for its new Gigafactory Berlin. It’s expected to produce two million cars annually…
Great Expectations for Gigafactory Berlin
A German media magazine, Focus.de, has suggested that Tesla’s upcoming Gigafactory Berlin is expected to produce two million cars annually. It cites sources that are, allegedly, familiar with the American company’s plans. For perspective, Volkswagen’s famous Wolfsburg factory (one of the largest in the world) doesn’t even produce one million cars a year. Nevertheless, the figure makes perfect sense. In choosing Berlin as the site of its latest Gigafactory, Tesla is looking to take on legacy automakers in their own territory; not to mention tapping into Germany’s famous reserves of engineers and automotive experts.
Until recently, Tesla exclusively assembled its cars in Fremont, California. It’s now rapidly expanding its manufacturing capacity, launching a gigafactory in Shanghai, China. It covers a 86 hectare plot and is expected to produce 500,000 cars a year. The Berlin facility is still under construction. As it stands, the market share of all-electric cars in Europe is expected to reach 12 million cars annually within a few years. With two million vehicles produced annually, Tesla would bag 16% of the market share for itself; still relatively modest, but nevertheless impressive given the relative youth of the company.
But Can It Be Done?
Tesla has something of a track record when it comes to over-promising – admittedly via the words of its CEO, Elon Musk. He’s repeatedly promised the rollout of fully driverless cars, only for his time frames to be proven unrealistic. For instance, he’s continually pledged to produce a million ‘robotaxis’ by the end of 2020. In addition, Tesla has sometimes struggled to meet demand in the past. It infamously had to set up a production line in an open-air tent last year, after it ran out of manufacturing capacity. With the creation of gigafactories in Berlin and China, this is something it hopes to avoid in the future.
Regardless, it would be extremely ambitious for an automaker to hope to produce a million ICE vehicles at a single facility, let alone two million all-electric models. Whilst the winds of electrification are blowing over the automotive industry, the cars remain relatively niche for now. But perhaps that’s just the point. Tesla is thinking long-term. In setting up shop in Germany and China, it’s entrenching itself in some of the most lucrative markets in the world. It believes that electric cars are the future of the industry. When consumer interest is sufficient, it wants to be first in line to meet their demand for low-emission mobility. Precisely how legacy automakers will respond remains to be seen. But competition, no doubt, will be fierce.
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