Tesla’s Berlin factory will open, but tesla’s future is still in China

2022-05-19 0 By

Tesla’s Gigafactory in Berlin is finally going live.On January 23, it was reported that Tesla had told employees in Germany that the Model Y from its Gigafactory in Berlin was now available for order and would be delivered in March.This means that tesla’s gigafactory in Berlin, which has been plagued by delays, has finally opened, and the company’s future capacity constraints are likely to be alleviated.In fact, Tesla has been making a final push to open its Gigafactory in Berlin.Earlier, for example, Tesla received new approval to test-produce 2,000 Model Y cars at its German factory as part of mass production.This is not the first time Tesla has received such approval.Earlier, Tesla had received approval to produce 250 Model Y cars for testing.It is understood that the initial production of 250 Model Y cars did not meet Tesla’s expectations for quality, so the second trial was initiated.In addition, media leaks revealed that the German-made Model Y has a higher payload than the Chinese-made version.The data shows a 172kg difference between the 562kg payload of the German Model AND the 390kg payload of the Chinese Model, suggesting that there may have been some significant structural changes to the German Model Y.The more information coming to light, the closer tesla’s Gigafactory opens in Berlin, the more it points in one direction.Musk had previously said he would visit the Berlin factory in the near future to celebrate the plant’s opening, but had to change his schedule after a leak of his private jet’s itinerary raised concerns about his safety.The opening of the Gigafactory in Berlin will be an important milestone for Tesla, which can focus more on the European market.With the opening of the Berlin plant, Tesla’s global strategy will be better implemented, and the goal of 1.5 million production and sales by 2022 will no longer be out of reach.So does the opening of tesla’s Gigafactory in Berlin mean that tesla’s Shanghai plant will play a smaller role?For this problem, let’s take a good look.The Berlin plant with difficulties has always played a very important role in Tesla’s system for the Berlin Gigafactory, which is tesla’s first gigafactory in The European continent. One of the important reasons for Tesla’s selection of Germany is that it is the center of Gravity of European automobiles.If Tesla can establish a firm foothold in Germany, it means that Tesla can focus on Germany and expand the whole Europe, which is why the Berlin factory has been attracting attention since the announcement of the construction.However, the greater the expectation, the greater the disappointment.While Musk announced in November 2019 that he would build his first European factory and design center near Berlin, Germany, he added that the new plant would produce batteries, powertrains and complete vehicles, especially the Model Y, and be up and running by 2021.The Gigafactory in Berlin, Germany, has not opened in 2021 as Musk had hoped. Instead, it has been delayed, and although it is now in pilot production, all the preparations have been met, the earliest it could open at the current pace is early March.As a matter of fact, Tesla has not only been delayed in starting production, it has been blocked from the very beginning, for example, after it bought the land needed to build the factory.Because an endangered bat species lives in the forest where the plant is located, Tesla will have to wait for the local nature Conservancy to remove the bats before it can start construction.After the bat problem was solved, local residents and environmental groups opposed tesla’s gigafactory, fearing water, traffic and noise pollution.And then, because of the spread of the virus, because of fears about Novel Coronavirus and the US President’s coming Travel ban in Europe, Tesla even simply withdrew all of its US employees working at the Gigafactory in Berlin, bringing construction to a standstill.In April 2020, tesla had to modify the foundation due to soil problems, which led to another plant shutdown in Berlin.To make matters worse, last October Ivan Holtsky, tesla’s head of engineering, procurement, and construction at the Berlin gigafactorplant, left the company amid internal and external troubles.Finally, by the end of January 2021, tesla’s Gigafactory in Berlin was taking shape and nearing production.Tesla also advertised in March of that year for production to begin in July.However, the gigafactory has been built, but the start of production has been delayed due to environmental approval. It was not until a while ago that tesla’s Berlin Gigafactory started trial production that a glimmer of hope emerged.As for the Berlin plant, which has been plagued by delays, Garrett Nelson, a senior equity analyst at CFRA Research, said, “Because the Shanghai Gigafactory is being built incredibly fast,They may have miscalculated how quickly the Berlin plant would be up and running, perhaps not fully taking into account the significant difference between the two.Indeed, as for the Berlin plant’s problems, Mr Musk said during a previous visit to the Glenhead construction site that “less bureaucracy would probably be better”.Despite Musk’s frustration with the pace of construction, Tesla is breathing a sigh of relief now that the Berlin plant is nearing production.Still, Tesla can’t rest easy.As Tesla’s share of the European market grows, a key challenge for the Berlin plant is how to ramp up production quickly.For Musk, I think that’s a small issue.Does the opening of tesla’s Berlin Gigafactory mean the Shanghai Gigafactory will be further diminished?Not necessarily.While the opening of the Berlin Gigafactory is nearing, there is still the possibility of further delays due to the German government’s attitude towards Tesla.Indeed, there is some scepticism about the exact timing of the plant’s opening, with Wedbush equity analyst Dan Ives, for example, saying: “Given the red tape in Europe, the timeline is still uncertain.”But the Berlin Gigafactory needs to be operational by March 2022 or it will affect Tesla’s capacity targets.”Moreover, although the planned production capacity of the Berlin factory in Germany is as high as 450,000 units, as a brand new factory, its initial production capacity cannot meet the demand of the European market.Tesla had previously announced plans for the Berlin Gigafactory assembly line to start production at a rate of only 1,000 vehicles per week, with incremental production thereafter.At that rate, production capacity could be less than 5,000 a month and less than 30,000 in half a year.The Model 3 has become the most popular electric car in Europe, with Tesla selling 93,545 units in 11 European countries over the past year, according to data.Since the Berlin plant will only be able to produce the Model Y initially, that means the European market will remain dependent on the Shanghai Gigafactory for support in the short term.If Tesla fails to increase the production capacity of Model Y in a short period of time, the Shanghai plant will still be responsible for the delivery of part of Model Y in the European market even in the early stage of 2022, which is obviously inconsistent with the original intention of Musk to build the Berlin super factory.While Tesla has long sought to downplay the Shanghai Gigafactory, the result is that it is increasingly entrenched.In 2021, Tesla delivered 936,000 new cars worldwide, and its annual production reached 930,000 units, nearing the million mark.Tesla’s achievements in 2021 are largely thanks to the Chinese market, Chinese users and Chinese manufacturing.Of Tesla’s global deliveries of 936,000 units in 2021, 51.7 percent came from tesla’s Gigafactory in Shanghai.It is worth mentioning that of the 484,100 units delivered by The Shanghai Gigafactory in 2021, more than 320,000 units will be delivered to the Chinese market, which means that The Chinese market has surpassed the US to become Tesla’s largest single market, even though tesla deliberately slowed down the delivery pace.In 2021, tesla’s production capacity at the Shanghai Gigafactory was mainly exported in the first half of each quarter to meet deliveries in The European market, leading to repeated delays in the Chinese market.In May 2021, the Shanghai plant produced more than 34,000 Model 3/Y units. In addition to 22,000 Model 3 units sold to Chinese consumers, more than 11,000 Model 3s were shipped overseas. By August, Tesla’s Shanghai Gigafactory even exported more than 31,379 vehicles.Although Tesla attempted to reduce the delivery pressure in The Chinese market by adjusting prices for many times, it still failed to block the enthusiasm of Chinese consumers.According to Tesla’s website, the delivery cycle for Model Y and Model 3 is 12 to 16 weeks.Tesla started work on the expansion of its Gigafactory in Shanghai late last year due to surging demand in China.It is understood that the total investment of the production line optimization project is up to 1.2 billion yuan, which is expected to be completed in April next year.When completed, tesla’s Shanghai Gigafactory will be the world’s largest neV plant, with an annual production capacity of more than 1 million vehicles, up from 500,000 currently.Arguably, the Gigafactory and the Chinese market are indispensable if Tesla is to meet its sales target of nearly 1.5 million vehicles by 2022.Conclusion: For Tesla, with the launch of tesla’s Berlin Gigafactory, the pressure hanging over it will be relieved to some extent, which means tesla can spend more time on the expansion of the European market.It should be known that although Tesla will continue to sell well in the European market in 2021, the sales champion is the Volkswagen ID family, which has not made much progress in the Chinese market. The production of the Berlin Gigafactory makes Tesla really have the confidence to compete with other European car companies.In addition, with the production of Tesla’s Berlin gigafactory, Tesla can be regarded as a global auto company. The four gigafactories in the United States, Central Europe and China will allow Tesla to compete everywhere in the future.