Tesla plans to start battery production at its factory outside Berlin as early as 2027. According to reports, Elon Musk’s only European electric car factory is preparing to achieve a battery production capacity of up to 8 gigawatt hours per year. This move will change the current model in which components are manufactured in Germany but finished batteries need to be imported from the United States. According to the planned production capacity, it can meet the annual assembly demand of 130,000 electric vehicles.
Tesla’s production expansion coincides with the EU’s adjustment of its electrification promotion policy. After months of pressure from the industry, the European Commission has decided to relax relevant regulations originally scheduled to ban the sale of new fuel vehicles starting in 2035, providing greater flexibility for car companies to transition to clean energy transportation. Tesla is taking advantage of this trend to increase its European manufacturing footprint.
In order to bring the battery production line into full production, Tesla plans to invest nine figures in the factory to upgrade existing infrastructure. Since the Greenheide electric vehicle factory was put into operation in 2022, Tesla has invested billions of euros in it.
Tesla revealed that "if conditions are ripe", the entire battery industry chain may be concentrated at the Greenheide base in the future. However, European battery production is currently facing fierce competition from Chinese and American manufacturers, making profitability difficult, and Europe still lags behind China in terms of large-scale battery production capacity construction.
It is worth noting that Tesla’s European business is encountering multiple challenges: lagging product lineup updates, Musk’s political stance causing controversy (including support for Germany’s far-right Alternative for Germany party and involvement in the Trump administration), and disagreements with European regulators over the promotional positioning of its “Full Self-Driving” (FSD) system. The above factors have led to a decline in Tesla’s European sales.