Musk Hints At Germany For Possible Gigafactory Location

JUN 20 2018 BY STEVEN LOVEDAY 20

Tesla CEO Elon Musk has dropped some hints that suggest the company’s next Gigafactory will find a home on the French-German border.

Back in 2016, after sharing the Grohmann Engineering acquisition, Musk announced future plans to build a second battery factory in Europe. Since then, several people have tried to woo the CEO into choosing their country as the prime location. Nonetheless, due mostly to the Model 3 production ramp, we haven’t heard much news about this endeavor, along with Tesla’s plan to build other factories and numerous Gigafactories around the globe.

Autocar reported that the next Gigafactory “is almost certain to be in Shanghai,” followed by the European location. The publication also states that the proposed location for the Euro battery facility puts it nearest Belgium, Luxembourg, and the Netherlands. It states that, while not confirmed, Germany is a top choice.

Having the Gigafactory nearby Tesla Grohmann Automation in PrĂ¼m, Germany makes obvious sense. If Tesla can assure that its battery factory, a new production facility, and the site that builds its automated equipment and technology are all located within a reasonable distance from one another, this should facilitate production. Vehicles are not manufactured at Grohmann, but it serves as the automaker’s current “hub” for factory development.

As Tesla pushes to become profitable, many of its plans to expand globally seem to be put on hold. However, the situation is a double-edged sword. The primary reason the company is not profitable is due to it continued investment in the future. In order to build produce more cars and build economies of scale, Tesla needs to move forward with additional factories for batteries and cars. Sadly, if the automaker continues to spend all of its money on upgrades, expansions, and new products, profitability will continue to suffer.

We can only hope that with the recent layoffs, as well as the growing success of Model 3 production and deliveries, Tesla will find itself in a situation in the near future in which it can follow through with the proposed expansion.

Source: Autocar

Categories: Tesla

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20 Comments on "Musk Hints At Germany For Possible Gigafactory Location"

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Might there be another reason to already mention Germany as the probable location for the European Tesla Gigafactory?

Sure; Germany’s excellent transportation system, including a very well developed railroad system, and perhaps the best pool of trained automotive assembly workers per capita of any country in the world.

But you could point to similar benefits for Tesla locating Gigafactory One adjacent to the Fremont assembly plant, in California. Yet Tesla chose to locate it hundreds of miles away, where land was cheap, in a State with relatively low wages, and State laws with weak collective bargaining/ union protection. All rather different than conditions in California — or Germany.

“in a State with relatively low wages, and State laws with weak collective bargaining/ union protection.”

You don’t have a right to employment. If you want a raise, you negotiate with the boss or leave to get better pay elsewhere. That’s how it works in the free market.

Germany has a very high electricity price – second highest in the EU. Plus alot of coal is still used in Germany, hence I dont think it’s the best choice for a gigafactory.

Doesn’t really matter when it is run off of PV on the Roof.

I have not seen any PV on any Tesla roofs to date

Tesla’s Tilburg assembly plant has an expansive rooftop
https://i.imgur.com/og57kUF.jpg

At the French border there is plenty of clean electricity to be had from the french nuclear power plants. And isn’t the electricity rate really cheap for the industry in Germany? As far as I know the private electricity consumers subsidize the industry heavily.

How can you call French or any nuclear power plants clean energy.

Well, they don’t make any air emissions, like Nox, CO2, SOx… or things like that. The radioactive waste is well controled. So France has an electric production system with low emissions, and quite cheap. Is impossible that all the electricity will be eolic or solar for every day, is necessary some alternatives with fast respons to the variable demand or adverse weather conditions to guarantee the electric supply.

It is probable the cleanest and safest energy source we have. Zero local emissions and the lowest average LCA-emisisons. Lowest count of deaths per energy unit generated. Least infliction of nature with a very small footprint needed for generation. And a number of other benefits.

Unlike for example the much dirtier electricity in New Zealand where 15-20% still is fossil even though the resources are almost endless for clean energy. Or that dirty coal mining… time to clean up your back yard.

Because they ARE. No CO2 and they produce energy all the time, not intermittently like solar and wind. Best option for base load generation. The tragedy is that the USA and China, the two biggest electricity producers, went so big for coal. USA could have continued nuclear development but didn’t for complex reasons: politics, misguided “environmentalism”, bad management and regulation, non-standardized designs, high cost of capital in ’70s and ’80s etc.

France gets about 75% of its electricity from nuclear and has CO2 emissions that are only 1/3 of USA per person. China gets about 75% of its electricity from coal and, while still a relatively poor country, makes much more CO2 per person than France (though a lot less than USA).

For ordinary people, Germany indeed has some of the highest electricity prices in the world. That is partly due to the fact we have enormous renewable energy capacities though (this year probably around 40% renewable in electricity production, see here: https://www.energy-charts.de/energy_pie.htm?year=2018 ). Keep in mind that Germany is very densely populated and has a lot of energy intensive manufacturing, so it is harder for Germany to get to 100% renewables compared to let’s say Spain (not even mentioning the bad weather for Solar in Germany).

For big companies though the prices are far lower, because they don’t pay the feed in tariff and the electricity price at the exchange for commercial use has actually decreased a lot because of higher supply by renewables while still having the old production capacities.

Then again, France has very low electricity prices, so maybe it could be on the French side as well?

Germany has a very high RESIDENTIAL electricity price. However, they subsidize their industrial electricity prices with high residential prices to support their industries.

Hmmm, hasn’t Autocar previously reported as “news” at least one rumor about Tesla which proved to be completely unfounded?

I’m going to be surprised if the European location turns out to be Germany. Sure, that’s optimal for finding skilled workers, but rather sub-optimal in terms of high wages, extended weeks of paid vacations, and in general much more legal support for union rights and collective employee bargaining than is found in even pro-union States in the U.S. (Not that I’m at all opposed to collective bargaining — rather the opposite! But it’s not best for Tesla’s profit margin.)

And as Ahldor already noted, electricity prices are rather high there.

All in all, I think a location in Central or Eastern Europe makes more sense for Tesla than a location in Western Europe.

Just my speculation, of course.

Progressive from Wisconsin

Spain might be a better location due to lower wages. But if Tesla wants to be closest to its biggest European Markets such as Scandinavia, Holland, France and Germany, it is about the right place. Germany does have a skilled and dedicated work force, better relations with labor, and good banking and governmental support for renewable energy.

Spain has better condicions. Lower labour costs, but a very decent education system with lot of graduates, a transport infraestructure with so much highways as Germany, a very good railway network, lots of ports, and the best climatic conditions for solar, with a hig electricity production from renewables. And a huge experience in car production, is the second european producer, and 8th worldwide. Makers as Renault, VAG, Mercedes Benz, Nissan, PSA, Ford, Iveco… have several factories. And there are a very important and experienced industry of all kind of providers, plastics, interiors, metalurgic products, electric and electronic systems….
And the new govern, it will be most interested in the Tesla’s point of view about clima and electric production or mobility, than the precessor.

A few years down the road there will be another Tesla Gigafactory in Europe.

One Gigafactory in Germany and one Gigafactory in (southern) Spain, how about that?

Putting it in Germany would only be because of political reason. It would be so much easier for many Germans and Europeans to buy “Made in Germany” and it would also force German politicians (which basically rule the EU) to include Tesla in their considerations when they have many thousand German workers on their team and paying billions in tax.

I would think somewhere in Eastern Europe for cheaper land and labor costs. Or perhaps the mediterranean for better climate.