Tesla CEO Musk hands over the first cars of the new German gigafactory

GRUENHEIDE, Germany, March 22 (Reuters) – Elon Musk on Tuesday presided over the delivery of Tesla’s first German-made cars to customers at the Gruenheide plant, worth 5 billion euros ($5.5 billion). dollars), marking the start of the American company’s first European hub. and the biggest investment in the German automotive industry in recent history.

The 30 customers and their families received their vehicles onsite by a glitzy, neon-lit Tesla-branded exit, thronging as Musk arrived.

“It’s a great day for the factory,” Musk said, describing it as “another step towards a sustainable future.”

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Chancellor Olaf Scholz, also present, hailed the plant as a sign of progress and the future of the automotive industry.

Not everyone is supporting Tesla, however, with environmental groups gathering outside the factory on Tuesday with banners, pots and pans to voice concerns, ranging from the factory’s high water usage to the trees felled to build it. Read more

Musk had hoped to start production at the factory eight months ago, but local authorities in Germany said it was still completed relatively quickly despite licensing delays.

Tesla received the final green light from local authorities on March 4 to begin production, provided it met several conditions, covering issues such as water use and air pollution control.

“Some people didn’t believe Germany could do this,” regional finance minister Joerg Steinbach told rbb radio, adding: “We showed the world.” Read more

RACE WITH VW

Chosen Tesla customers will receive the Model Y Performance configuration, a vehicle costing 63,990 euros ($70,491.38) with a range of 514 km (320 miles), the company said, adding that new factory orders could be delivered from April.

Tesla said about 3,500 of the plant’s expected 12,000 workers have been hired so far.

The licensing delay meant Tesla had to meet earlier European orders from its Shanghai factory, driving up costs.

“It makes a huge difference in the efficiency of capital to locate production on a continent,” Musk tweeted.

At full capacity, the plant will produce 500,000 cars a year, more than the 450,000 battery-electric vehicles its German rival Volkswagen (VOWG_p.DE) sold globally in 2021.

It will also generate 50 gigawatt hours (GWh) of battery power, surpassing all other German power stations.

For now, Volkswagen is still in the lead in the race to electrify the European fleet, with a market share of 25% compared to 13% for Tesla. Musk said ramping up production would take longer than the two years it took to build the factory. Read more

JPMorgan predicted that Gruenheide would produce around 54,000 cars in 2022, rising to 280,000 in 2023 and 500,000 by 2025.

Volkswagen, which has already received 95,000 orders for electric vehicles in Europe this year, is planning a new €2 billion electric vehicle plant alongside its Wolfsburg plant and six battery factories across Europe.

But its schedule is behind Tesla’s, with the electric vehicle factory opening in 2026 and the first battery factory in 2023.

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Reporting by Victoria Waldersee, Nadine Schimroszik; Editing by Jan Harvey, Edmund Blair, Alexander Smith and Alex Richardson

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