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Tesla plans to build a gigafactory in Germany, chief executive Elon Musk said, adding the facility will also include a design center.
“Everyone knows that German engineering is outstanding, for sure. That’s part of the reason why we are locating our Gigafactory Europe in Germany. We are also going to create an engineering and design center in Berlin, because Berlin has some of the best art in the world,” Musk told media, as quoted by CNBC.
This will be Tesla’s fifth manufacturing facility after the factory in California; the gigafactory in Nevada; the Buffalo, New York, plant; and a car factory in Shanghai.
Musk has been talking about a European production facility for years, and now that the company has returned to profitability, it seems like the right time to announce the move. It will doubtless make car deliveries for the European market a lot less hassle-free than having to ship them from the United States. Also, with the threat of a tariff spat between the White House and Brussels, the danger of retaliatory tariffs that could hit Tesla hangs in the air.
Last month, Tesla announced it had begun sales of Chinese-made Model 3s, with a price tag of a little over $50,300. The Chinese market is key for the EV maker because sales at home are beginning to fall because of the rollback of government tax incentives. While the decline may be temporary, there is also incoming competition, so doubling down on its international push is the smart choice.
Related: The One Metric That Matters For Electric Cars
Europe is a strong market for EVs: with one Tesla model recently became the most sold car there. Tesla sold 17,490 Model 3 cars in the European Union in September, making it the most sold plug-in EV on the continent, according to data compiled by Clean Technica. The other two Tesla models, X and S, sold a lot less, confirming the Model 3 as the flagship car it was conceived as: the affordable luxury EV that would turn Tesla into a mainstream carmaker.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.