Tesla picks Berlin for European Gigafactory

A Tesla factory in the Chinese city of Shanghai on Nov 8 2019

After launching manufacturing facilities in the USA and China, Tesla's next location is apparently in Europe.

Tesla CEO Elon Musk confirmed Tuesday night that the company would be building its so-called "Gigafactory 4" in Berlin, Germany.

The factory will produce "batteries, powertrains & vehicles", starting with the upcoming Model Y crossover.

In a later interview with trade magazine Auto Express, the serial entrepreneur said Brexit had influenced the company's choice as it had "made it too risky to put a Gigafactory in the United Kingdom".

Berlin also has earmarked financial support for manufacturing electric vehicle battery cells.

Musk has previously suggested setting up a Tesla base in Britain.

Tesla faces big investments with the launch of new factories and the development of products, including a pick-up truck and a semi-truck. Musk had said in June previous year that Germany is the frontrunner for its first factory in Europe.

The company will also set up an engineering and design centre in Berlin, Mr Musk said at the Golden Steering Wheel event.

He said that the plan is for the factory to be built near Berlin's new airport, which is located just outside the city limits in neighbouring Brandenburg state and due to open next year after years of delays. "On the contrary, they also profit", said economist Alexander Schiersch, noting that demand created by Tesla will "strengthen the whole supplier industry here at home".

Tesla Inc.'s manufacturing push into China, the world's largest market for both electric vehicles and luxury cars, may boost the USA automaker's profitability more than investors expect, according to Morgan Stanley.

Tesla unveiled its first vehicles assembled at the Shanghai facility earlier this month, made as part of trial operations.

But the uptake of electric cars only gathers pace slowly, forcing the government to give up on its target to have one million electric cars on the road by 2020.

The company has an engineering firm in Pruem, Germany, that specialises in automated manufacturing systems for battery plants.

"In contrast the German government is committing big support for EV in the coming years", said Bailey. It will also cut costs for Tesla in one its most important markets, especially for the mid-priced Model 3.

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