Elon Musk, the CEO of Tesla, danced for joy at the opening of his “giga-factory” electric car plant near Berlin on Tuesday, shrugging off two years of bureaucracy and delays to see customers drive away with the first Model Y vehicles built in Europe.
“Danke Deutshland!” (Thank you, Germany), Musk tweeted after the red ribbon ceremony, where he joined workers in applauding the first 30 drivers to drive their new cars.
During the handovers, the US billionaire even did a little dance, bringing back memories of the slightly awkward jig he did at a launch event in Shanghai in 2020 that went viral. The factory’s opening brings to a close a two-year approval and construction process that saw Tesla face a slew of administrative and legal challenges, as well as local residents’ concerns about the site’s environmental impact.
Tesla finally received formal approval from regional authorities to begin production earlier this month, after starting construction at its own risk.
The “giga-factory” in Gruenheide, Brandenburg, Germany, is Tesla’s first production site in Europe, and officials hope it will help the region establish itself as an electric vehicle manufacturing hub.
The California-based company plans to employ 12,000 people at the factory, which will produce around 500,000 Model Y compact SUVs per year. The arrival of Tesla is expected to shake up Germany’s flagship car industry, setting the stage for fierce competition with rivals Volkswagen, BMW, and Mercedes-Benz as they transition from traditional engines to cleaner electric vehicles.
“The new era in the auto industry has now arrived in Germany as well,” said Center for Automotive Research analyst Ferdinand Dudenhoeffer.
Tesla’s focus on Europe comes as the continent grapples with sky-high energy costs, which have pushed up gasoline prices, prompting some drivers to consider electric vehicles. According to analysts at investment firm Wedbush, the “Giga Berlin-Brandenburg” is “one of Tesla’s biggest strategic endeavors over the last decade and should further vault its market share within Europe over the coming years as more consumers aggressively head down the EV path.”
However, Tesla has not been spared the pain of key material shortages and supply chain disruptions, which are afflicting other automakers and are linked in part to Russia’s invasion of Ukraine.
Last week, Musk tweeted that raw materials and logistics were experiencing “significant recent inflation pressure.”
The inauguration, which was attended by Economy Minister Robert Habeck and Chancellor Olaf Scholz, was dubbed “a special day for Germany’s mobility transformation.” Habeck said electric cars took Germany “one step further away from oil imports,” a nod to efforts to reduce reliance on Russian energy.
He also advocated for more “Tesla speed” in other infrastructure projects, such as renewable energy expansion.
Despite Musk’s frustrations with the red tape that slowed his Gruenheide plans, the factory was up and running in record time by German standards.
However, environmental activists protested near the site, indicating that the inauguration was not universally welcomed.
One of their demands, according to Lou Winters of the environmental group Sand in the Gears, was for better and free public transportation instead of “yet more cars.”
The new owners received the Model Y Performance configuration, a vehicle costing 63,990 euros ($70,491) with a 514 km (320 miles) range, Tesla said, adding that new orders from the plant could be delivered from April.
Tesla said that around 3,500 of the plant’s expected 12,000 workers have been hired so far. But its timeline lags Tesla’s, with the EV factory due to open in 2026 and the first battery plant in 2023.