German plant drives Tesla value above US$1B

(Bloomberg) — Nearly 19 years after its founding, Tesla Inc. has a network of automobile factories that spans the globe.

The leading manufacturer of electric vehicles officially opened its plant on the outskirts of Berlin on Tuesday and delivered the first 30 Model Ys to customers in the presence of German Chancellor Olaf Scholz. The CEO, Elon Musk, fulfilled his promise to dance, as he did two years ago when Tesla opened its plant in Shanghai.

Tesla shares advanced for the sixth consecutive day, rising to 6.8% to $984 and driving the company's market capitalization above $1 trillion.

The €5 billion (US$5.5 billion) facility, first announced in late 2019, will boost Tesla's ability to manufacture electric SUVs, as Russia's invasion of Ukraine increases fuel costs. The question for 50-year-old Musk is how quickly the company will be able to increase production amid supply chain challenges in the industry, including the shortage of semiconductors and battery components.

“The start of production is good, but volume production will be the difficult part,” Musk said in October during a visit to the plant's construction site. He said then that by the end of this year, Tesla would aim to manufacture between 5,000 and 10,000 vehicles per week.

Tesla's Grüenheide plant is essential for Musk to capture more of Europe's expanding EV market. Last week, he tweeted that he was working on a new “master plan” for the automaker and wrote on Monday that “scaling to extreme size” would be a main topic.

The start of Model Y deliveries at the factory is the culmination of a surprise announcement Musk made when he accepted an award more than two years ago during an event attended by the directors of BMW AG, Volkswagen AG and Audi. The company now produces from the automotive heart of Germany, where Tesla has hired more than 3,000 workers.

That number will grow in the coming months, Tesla said in an emailed statement. The company expects to eventually employ 12,000 people once full production is underway.

“We need to support the progress that is driving new technologies, because that is how we will get new jobs,” Scholz said in statements prepared for a speech at the facility.

Though Tesla built the plant quickly, it was beset by months of permit delays that sometimes exasperated the richest person in the world.

Concerns at the site focused on its environmental impact, as activists oppose the cutting of trees that preceded construction and the effects the plant will have on wildlife and water supply. The latter problem could persist and be a factor in Musk's expansion plans, as the local authority warned last week that further development will not be possible without additional mining permits.

Original Note:

Tesla's German Feat Pushes Market Value Back Above $1 Trillion

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