Tesla plans to produce 500,000 cars a year in Germany

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
Tesla CEO Elon Musk arrives on the red carpet for the automobile awards "Das Goldene Lenkrad" (The golden steering wheel) given by a German newspaper in Berlin, Germany, November 12, 2019. REUTERS/Hannibal Hanschke
Tesla CEO Elon Musk. Photo: Hannibal Hanschke/Reuters

Tesla (TSLA) chief executive Elon Musk surprised the audience at a car-awards show in Germany in November when he announced that he had chosen the state of Brandenburg, which surrounds Berlin, as the site for Tesla’s first European production base.

Tesla’s application for the factory was officially submitted last week. Local and state authorities have a few months to review the plans and assess the environmental impact of the new plant.

While Tesla initially said it would produce the Model Y at its Brandenburg plant, official papers filed in the Brandenburg gazette reveal it will also manufacture its bestselling Model 3 at the new factory.

The official paper says that Tesla is targeting to achieving a future production volume of 500,000 units annually.

The plant will include a body shop, paint shop, powertrain, plastic, and battery production, final assembly, and a wastewater treatment plant. Tesla aims to begin operations in July 2021.

The company recently announced record sales for 2019, delivering 367,500 vehicles globally, and 112,000 of those in the fourth quarter, powered mainly by sales of the Model 3. At the end of December, the company officially started first deliveries of cars from its new Shanghai plant in China — the first Tesla plant outside US, and built in 10 months.

READ MORE: Elon Musk to build first European Gigafactory near Berlin

At the time of his Brandenburg announcement, the Tesla CEO told Auto Express that Brexit uncertainty had made the UK “too risky” as a location for his plant.

Brandenburg, one of Germany’s poorest states in terms of its gross regional product, welcomed Musk’s news with “great euphoria,” while federal economics minister Peter Altmaier lauded it as “further proof of the attractiveness of Germany as an automobile location.”

Tesla German Gigafactory is expected to create over 3,000 jobs initially, and up to 8,000 positions once it is fully up-and-running, according to the Brandenburg government’s estimations.