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Tesla's German Gigafactory Delivers the First Model Ys After Officially Starting Production

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【Summary】Tesla's bold plans to dominate the electric vehicle market in Europe is one step closer as the automaker's new factory in Germany kicked off production of the first European-built Model Y vehicles for the local market. Tesla Chief Executive Elon Musk traveled to Germany to celebrate the milestone and oversaw the handover of Tesla's first German-made cars on Tuesday.

FutureCar Staff    Mar 22, 2022 12:15 PM PT
Tesla's German Gigafactory Delivers the First Model Ys After Officially Starting Production
Tesla new Gigafactory in Gruenheide, Germany on March 20, 2022. (Photo: Reuters/Hannibal Hanschke)

Tesla's bold plans to dominate the electric vehicle market in Europe is one step closer as the automaker's new factory in Germany kicked off production of the first European-built Model Y vehicles for the local market.

Tesla Chief Executive Elon Musk traveled to Germany to celebrate the milestone and oversaw the handover of Tesla's first German-made cars on Tuesday. 

"This is a great day for the factory," Musk said, describing it as "another step in the direction of a sustainable future".

Around 30 clients were on hand, to see the first completed vehicles exiting the factory through a neon-lit Tesla branded tunnel, Reuters reported. The crowd was heard clapping and cheering as Musk danced and joked with fans.

The new Tesla vehicle owners received the Model Y Performance model, which is priced at 63,990 euros ($70,491) with a 514 km (320 miles) according to Tesla. The company said that new orders from the plant could be delivered to European customers starting in April.

German Chancellor Olaf Scholz also attended the event, praising the gigafactory as the future of the car industry.

The factory is located near the small community of Gruenheide and is officially named the "Tesla Berlin-Brandenburg Gigafactory" after the municipality it's located in.

Earlier this month, Tesla was issued a conditional building permit by authorities in Germany that greenlighted the start of production one Tesla proved it meets various conditions, including in water use and air pollution control, which it has.

Tesla's Gigafactory Berlin-Brandenburg is its first European production facility. Once fully operational, the factory will produce up to 500,000 Model Y SUVs each year for customers in Europe.

Production in Europe will help Tesla deliver the Model Y cars to European customers faster and more cheaply. In the interim, Tesla has been shipping the Model Y to Europe from its factory in Shanghai as its awaits approval to begin production in Germany. The Shanghai factory was Tesla's first overseas plant and was completed in late 2019.

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German Chancellor Olaf Scholz & Elon Musk attend the opening ceremony of the new Tesla's European Gigafactory. (Photo: Patrick Pleul/Pool via Reuters)

Tesla is still in the process of hiring workers for the new factory. The company said it hired around 3,500 workers so far. The plant will eventually employ up to 12,000 people once it is operating at full capacity.

With the production start in Europe, Tesla now has three factories up and running on three separate continents, including China and North America, with a fourth plant currently under construction outside of Austin, Texas. The three plants combined can support annual production of up to 1.5 million Tesla vehicles a year.

The Texas plant is slated to build Tesla's futuristic Cybertruck, although no timeline for its production has been disclosed yet and the launch was delayed as Tesla focuses on its more mass market and more profitable vehicles. 

The path to open the Tesla factory in Germany was filled with setbacks over the past two years, including pushback from environmental groups. Musk also blamed bureaucracy and red tape in Germany for the delays. 

Authorities in the state of Brandenburg where the plant is located said they received approximately 400 objections to Tesla's Gigafactory going back to 2020. The three main things the objections center around include scarce water resources, an increase in truck traffic, and the clearing of hundreds of trees to make space for the sprawling factory.

The factory was scheduled to begin building cars by July 1 2021, but the timeline was pushed back to late last year after Tesla added plans to add battery cell production at the site, which required an additional approval process.

Despite the construction delays and concerns of local regulators, Tesla's German gigafactory is for the most part, welcome in the region.

"We've gotten a lot of support and that's very much appreciated," Musk said in August of last year. "We feel very welcome and we're very happy to be here in Deutschland."

Musk said previously that the Model Y could eventually outsell all of Tesla's other models combined. The company wrote in its 2021 Q1 financial summary that it believes the compact SUV could become the best-selling vehicle of any kind globally.

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