For the past decade, Tesla has operated with only one vehicle assembly factory, but it’s currently building a new one in China and is considering another one in Germany, according to Elon Musk.
The CEO has been talking about building an electric vehicle factory in Europe for a long time now.
Musk sees Tesla having a factory in each of its major markets.
Tesla already operates its Fremont factory, which supplies vehicles around the world, but Tesla is currently building a factory in Shanghai to supply the least expensive versions of Model 3 and Model Y to the Chinese market and reduce logistics costs related to importing vehicles from the US.
The automaker would like to do the same with a factory in Europe to supply its European markets.
The CEO says Tesla is currently considering building a factory in Germany:
— Elon Musk (@elonmusk) April 24, 2019
The electric automaker already has a factory in Europe which is located in Tilburg in the Netherlands, but it is only used for ‘final assembly’ of Tesla’s Model S and Model X vehicles.
Musk has been talking about a full battery and vehicle factory in Europe for a while now.
Several European countries have even launched campaigns to try to attract Tesla in their home market.
Tesla was supposed to confirm a location for a factory in 2017, but it never happened.
Last year, Musk says that Germany is the “leading choice” for a factory in Europe and he even specified that “the German-French border makes sense” for a factory near the Benelux countries.
There’s no clear timeline for a Tesla factory in Europe. The company had previously promised announcements that never happened on that front.
Based on the market size for Tesla, a factory in Europe makes a lot of sense.
Maybe not as much sense as one in China and with the trade war, it’s probably why Tesla focused on a Chinese factory despite previously announcing plans for a European factory.
In China, Tesla managed to get some good financing from local Chinese banks.
It would be difficult for Tesla to embark on another multi-billion dollar project at the same time, but it’s not impossible if they again find a good financing option.
There’s no doubt that it would help reduce costs for local vehicles, but it would dramatically reduce the time between production and delivery, which will help Tesla’s overall finances.
Furthermore, if the factory actually ends up in Germany, it could help Tesla’s demand in the country, which prefers buying domestic vehicles.
Tesla tried that before by claiming that its vehicles are “partially German” as they were buying a German engineering firm, but the company is still having issues penetrating the market.
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