Tesla finally settles on Berlin for its next Gigafactory

A major electric vehicle (EV) production hub in Germany also solves the country’s long-standing problems with pioneering in the EV space, as it did with diesel and gasoline vehicles. German auto behemoths like Volkswagen and Daimler are still recovering from the “Dieselgate” scandal that rocked the automotive terrain a couple of years ago, and are now channelling their energies towards the EV niche. 

For Tesla, setting up production in Europe helps it circumvent global trade volatility in forms of trade tariffs and political altercations, which have wreaked havoc on imports and exports in the recent past. The new Gigafactory will be built in the GVZ Berlin-Ost Freienbrink industrial park next to the new Berlin airport, which is under construction. 

“I’m excited for Gigafactory 4 because I think it’s going to light a fire under German automakers,” said Musk. 

Though the statement does sound somewhat conceited, Musk has a point. The German auto industry has been slow to focus on EVs, in a market that is increasingly enamored by the promise of electrification in both comfort and in reducing carbon emissions. Tesla scents a market opportunity and hopes to compete with German auto incumbents like Volkswagen, which is now emerging as a major player in the EV segment. 

Tesla’s acquisition of German manufacturing robotics group – Grohmann Engineering – in 2016, will help expedite the construction of Gigafactory 4. On the flip side, automation within the factory would mean a reduction in labor needs, which could result in minimal job creation in the region. 

“This is great news for our country. We have engaged in intensive discussions and good arguments. I am happy that Elon Musk has chosen our location Brandenburg,” said Dietmar Woidke, the prime minister of the state of Brandenburg, in which Berlin is located. 

At Gigafactory 4, Tesla plans to build batteries, powertrains and Model Y cars – which Musk has claimed will have a higher demand than Model 3. Tesla is also stepping up the pace of constructing manufacturing hubs across the world, with Musk envisioning as many as 10 or 12 Gigafactories in the near future.