Tesla’s Giga Berlin production facility will revolutionize the electric automaker’s presence in the highly-concentrated European electric vehicle market. While Tesla holds considerable advantages in EV tech, pricing, range, and performance, it holds another considerably important element that determines a company’s ability to control pricing: battery production. With Tesla planning to manufacture its newly-detailed 4680 cells at the Berlin Gigafactory within two years, according to Economy Minister Jörg Steinbach, the company is setting the stage to infiltrate the intensely-competitive European EV market with the best and most affordable electric cars on the continent in record time.
After being approved for a slice of the $3.5 billion assistance package for the development of Giga Berlin’s 4680 battery plant, Tesla is set in a prime position to dominate the European battery production market. CATL and BASF SE both have large-scale battery manufacturing projects in Germany already, but Giga Berlin’s plant could displace them as Elon Musk once said it could be the biggest in the world.
During the 2020 European Battery Conference in November 2020, Musk said:
“I think it will be the largest. It would be capable of over 100 GWh hours per year of production and then possibly going to 200 to 250. I’m pretty confident at that point it would be the largest battery-cell plant in the world.”
And Tesla will need it. After coming off of a record year in deliveries and production figures, Tesla is continuing to ramp scalability as it tackles international markets for the first time in its history. After expanding to China with its Giga Shanghai plant, which began delivering cars in January 2020, Tesla had already started developing the Giga Berlin property by excavating the grounds and clearing obstacles that were there previously. Now, the factory is well underway and is expected to begin producing cars this Summer.
There still is no exact timeline for the 4680 battery plant, as it could take several years to figure out supply chain details from suppliers to Berlin. Tesla is also still figuring out the manufacturing processes of the 4680 cell at its Kato Road facility in Northern California. Elon Musk has said in the past that 4680 cells have been in working vehicles for some time, but at what scale? Only Tesla knows.
However, Jörg Steinbach, a vocal supporter of Tesla’s Berlin facility, now says the plant could open in two years, Bloomberg reported.
Despite regular hurdles to jump through, Tesla has had assistance from politicians all over Germany. With Steinbach’s support, another Economic Minister, Peter Altmaier, also extended his hand to the electric automaker, offering any help he can to expedite the factory’s construction. Environmental concerns, along with complaints from local citizens, have tied up Tesla from time to time at the factory. Still, construction has been moving along at an impressive rate since the official groundbreaking.
“You have to sometimes translate the culture of our approval procedures, which are also strongly influenced by environmental protection,” Steinbach said.
It is crucial for Tesla to open Giga Berlin so it can expand its outreach in the most EV-concentrated region on Earth. Steinbach says he is “totally relaxed” regarding the plant’s ultimate approval. He still expects EVs to roll off the line in July.
After the 4680 cell plant does open, Tesla will be able to scale-back costs of its EVs. Currently buying many cells from third-party suppliers, Tesla will still do that for the foreseeable future, according to Musk. However, creating more battery cells will decrease the shortage of batteries, making them less expensive and, at the same time, decreasing the price of Tesla’s cars. Because of this important point, the 4680 facility is of utmost importance.
“This project is given top priority,” Steinbach said.
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