Tesla To Open Production Factory In Europe When Annual Sales There Hit 160,000

JUN 25 2014 BY ERIC LOVEDAY 17

Tesla Model S in Europe

Tesla Model S in Europe

Tesla Model S in Europe

Tesla Model S in Europe

When annual sales in Europe cross the 160,000-unit mark, Tesla Motors will construct a factory there, according to Tesla CEO Elon Musk:

“My aspirations for Europe are that we sell a comparable number of cars in Europe as the U.S.”

That’s basically already been achieved, though perhaps Musk wasn’t briefed on the current sales situation.  For example, Tesla sold ~ 3,500 vehicle in the US in Q1, compared to nearly 3,500 in Europe.

On the global level, Musk say Tesla will have factories in the US, Europe and China when annual worldwide sales exceed 500,000.

Both the 160,000 mark in Europe and 500,000 globally are perhaps 5 years away from being achieved.

The obvious reason for Tesla to put up shop in Europe and China is logistics.  By having the vehicle built there, Tesla could cut costs, reduce delivery times  and increase profits.  Musk believes price reductions to the tune of 25% could be achieved through localized production.

Europe already has a Tesla final assembly site in the Netherlands, but production doesn’t occur there.

Source: Automotive News

Categories: Tesla

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17 Comments on "Tesla To Open Production Factory In Europe When Annual Sales There Hit 160,000"

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Will prob need a gigafactory there too.

So…it will happen never.

Big Solar

I wouldn’t speak so soon.

David Stone

I am inclined to agree.
We already pay more for cars here than in the us, more again for Teslas because they have no local production.

A price reduction of 25% will be necessary to achieve such sales

So the factory would probably have to come first…

krona2k

Don’t be one of the people that say ‘never’ with regards to Tesla. In the beginning most people said that they would never make a well performing electric car with decent range. The latest fad is to say that the gigafactories will never be built.

Mikael

20 000 Models + 20 000 Model X + 120 000 “Model E”.
So probably around 2020.

But I’m guessing the factories will be built 2022 for Europe and 2019 for China. The import taxes are much higher in China and demand will be higher than Europe so that will be the priority for a new factory.

Jouni Valkonen

Now if Finnish politicians were smart they would do everything what they can in order to get the Tesla’s European factory into Finland.

Actually, the possible next Finnish prime minister (the chairman of the second largest party) is already driving with Model S.

Mikael

Why on earth would they ever consider puting it in Finland? 😛
Long distribution for sales, high taxes, high manual labor cost etc. etc.
It will surely be somewhere in central Europe or central eastern Europe.

Boris

🙂 yes, Slovakia would be the ideal place, but I believe Elon is a fan of highly automated factories where cost of labor is not as important. That is why I believe he would put the manufacturing facility in the UK. Tesla is already planning a R&D center there…

Mikael

I doubt UK too. Cost and distribution is far from optimal.

I see three different options, either Belgium/Holland, Slovakia/Hungary or Romania/Bulgaria. And with that level of automation the gain of puting it in Romania/Bulgaria is lost.

And if they don’t include a plan for a battery factory straight away then keeeping it close to the harbor where they get the battery packs shipped to makes sense.

So two countries left in my opinion.

Boris

Romania/Bulgaria most likely not – super high corruption, lack of skilled labor, infrastructure not ideal etc etc. I believe the only cars manufactured in Romania are Dacias (owned by Renault), I am not even aware there is anyting in Bulgaria. When it comes to the former communist countries, the only contenders really are: Poland, Czech Rep, Slovakia and Hungary.

I still think it makes sense to build it in the UK as it’s a huge market and Tesla will be much more viewed as a home brand. I am guessing Rotterdam isn’t the only big port in Europe so shipping those batteries shouldn’t be an issue with the UK. I don’t think they would be manufacturing them in Europe as the gigafactory will be spitting out half a million packs a year so that’s plenty for 3 plants in UK, EU and China. I would be a happy camper if they did put it in Slovakia however…

Boris

By the way, a few months ago there were some rumors that Tesla was talking to Czech and Slovak governments about investment possibilities in these countries.

Veselin

About Bulgaria”:
High corruption – Agreed (good if you want to dump some waste in the river, bad because you are too close to Putin’s hands if he wants to stop your business.
Bad infrastructure – Agreed
Lack of skilled workers – Not agreed. For example HP choosed Bulgaria for their EU business with more than 4 000 workers, Great Wall (No.1 Chinese automaker) build cars in Bulgaria….many examples.

Boris

Perhaps, but one thing is skilled college graduates who speak fluent English and the other is finding quality people willing to do manual labor for not that much money. I am guessing it makes more financial sense to leave the country and work construction jobs in the UK or Germany. But anyway, I guess let’s just wait where the European Tesla factory will be, we have a few years of waiting ahead of us…

Dries Aerts

I like your thinking of Belgium. It makes perfect sense too, as the former Ford-factory in Genk would be an ideal Tesla-site.
There’s a railway connection, a port nearby, a massive factory-space and a test-track all available on-site. And the city of Genk plus its surroundings are packed with highly skilled automotive workers.
On top, there have been talks between Tesla management and Belgian politicians about the site. There might even be enough space for a gigafactory down the road.
It seems a better deal than expanding the facility in Tilburg (NL) where there is not as much space, and the comparison to the NUMMI-factory is also obvious.
When it’ll happen though remains to be seen..

Rob Stark

Originally Tesla planned to put their Assembly Plant and distribution center in the UK because of language. Then they discovered that all the government officials they met with in the Netherlands spoke fluent English and the pool of white collar workers that spoke fluent English was more than sufficient. And their are better logistics shipping throughout the EU from Netherlands so everything moved their.

They could have chosen a cheaper location in the East but decided against. Keeping your fixed assets far away from Putin is probably a good idea.

It is inevitable that Europe will reach 160k units and it will get a Tesla factory in continental Europe. At some point farther out the UK will also reach 160k units and get its own factory. But China will come first.

Cashie

Since our Australian manufacturers are all closing up shop in 2017, maybe Tesla could score a cheap factory and a ready workforce here?