The head of Mercedes-Benz’s work council admitted that Tesla’s acquisition of Grohmann Engineering, an automation firm, affected their own battery pack manufacturing plans.
In 2017, Tesla acquired a medium-size German engineering firm named Grohmann Engineering that was working with many automakers to deploy automated manufacturing equipment.
A few months after the acquisition, Tesla started dropping all of Grohmann’s existing clients in order to have all hands on deck for the build-out of the Model 3 production lines.
Earlier this week, we wrote that German media were reporting that Daimler was cutting its planned production of the Mercedes-Benz EQC electric SUV due to a battery shortage.
Daimler partly denied the reports, claiming that they still plan to produce about 50,000 EQC SUVs this year.
The reports stated that the supply issues were with battery cells from LG Chem, but now Daimler’s works council chief Michael Brecht says that they also had problems with battery pack manufacturing (via Reuters):
Daimler’s works council chief Michael Brecht told Manager Magazin that one of the reasons the company is struggling to meet battery demand is because Tesla bought Grohmann Engineering, a battery automation specialist hired by Mercedes-Benz to build up its own battery manufacturing capacity.
Based on Brecht’s comments, Tesla’s acquisition of Grohmann messed with their battery production plans. They had to adapt, and it’s now affecting their production ramp.
Tesla’s acquisition of Grohmann and turning it into its own Advanced Automation Group has proven a great move for the automaker.
It enabled them to ramp up Model 3 production, which you could argue saved the company, and now it’s growing Tesla’s manufacturing expertise that the automaker is using to deploy massive production capacity at Gigafactory 3 in China and Gigafactory 4 in Germany.
Cathie Wood, CEO and CIO of ARK Invest, compared Tesla’s acquisition of Grohmann to Amazon’s acquisition of Kiva Robotics:
#Tesla’s purchase of Grohmann Engineering reminds me of #Amazon’s purchase of Kiva Robotics. $AMZN pulled the rug out from retailers who didn’t understand that online was going to put many of them out of business. $TSLA may have done the same in the #auto world. https://t.co/ylAZ1dLcAQ
— Cathie Wood (@CathieDWood) January 23, 2020
Kiva Robotics automated and made Amazon’s core business, logistics, more efficient, and you could argue that Grohmann is making the same for Tesla’s manufacturing, which is Tesla’s core business, according to CEO Elon Musk.
I am sure that Tesla’s Advanced Automation Group is busy doing work for its parent company now, but it would be nice in the future for them to work with other automakers, like Mercedes-Benz, and help them produce more batteries.
What do you think? Let us know in the comment section below.
FTC: We use income earning auto affiliate links. More.