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Tesla’s Gigafactory In Germany Starts Deliveries After Delays

By Cristian Bustos. Originally published at ValueWalk.

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Tesla Inc (NASDAQ:TSLA) opened its Brandenburg Gigafactory in Berlin, Germany, and delivered the first vehicles on March 22. With an expectation of 500,000 cars a year, the facilities are touted as one of the most strategic moves by the giant electric vehicle (EV) manufacturer in over a decade.


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Feeding The European Market

Tesla’s Gigafactory is the largest factory of electric cars in Europe. Built on three km² of land just outside Berlin, Elon Musk’s company invested billions of dollars into the project, which was built at Tesla’s own risk without waiting for a final building permit.

As reported by Yahoo! Finance, construction was supposed to be completed in the summer of 2021, but it took until March this year for the final building permit to arrive, as the factory’s approval notice has been handed over to Tesla today.

 “Once everything is fully operational, the factory could help Europe take a significant step away from Petroleum and throws down the gauntlet to other carmakers to go electric,” DW correspondent, Steven Beardsley said.

He added, “Tesla built this factory here… for the same reason that Volkswagen (ETR:VOW3) and BMW —Bayerische Motoren Werke AG (ETR:BMW)— build in markets where they are selling. That is, for example, the US or China. It is basically a better investment of their capital to serve those markets.”

Benefits

The Brandenburg Gigafactory is a new addition to plants like Shanghai and California, and it will allow Tesla to build its models destined for the growing European market. The move represents a massive cost reduction for the company.

Volkswagen and Audi are also furthering their efforts in the EV market, but they are still playing catch-up with Tesla.

The Brandenburg Gigafactory factory comes about six months later than the company had hoped for. However, Tesla said it wanted to build a battery production facility as well, which lengthened the approval process.

“A lot of officials and a lot of politicians are looking at Tesla and this approval process as perhaps the way to move forward to try and speed up some major projects the company is eyeing in the future.”

The benefit that the German economy is getting is much higher than the number of incentives and subsidies paid by the German government. The Factory is expected to generate indirect 10,000 jobs on top of the massive Tesla investment.

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