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Tesla’s new factory in Germany could boost the European market

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Tesla’s new factory in Germany could boost the European market

the main source of export of electric vehicles Tesla was Chinabut with the opening of the factory in germany and the first cars produced could power the european market second Stephen Wilmot in The Wall Street Journal.

Tesla on Tuesday delivered its first products made in Germany in front of the Foreign Minister Olaf Scholz and the company’s CEO, Elon Musk, who offered the spectators a dance. It marks the advent of a ramp-up process that Musk called memorable. “production hell” in 2018 when I experienced it with the Model 3 in Fremont, California.

The new plant near Berlin probably won’t turn out to be so diabolical. Having resolved its problems in California, the company has been ramping up production at its shanghai plant for more than two years, and the German factory follows the model of the Chinese one. the New Tesla plant near Austin, Texaswhich is ramping up production at the same time, could lead to more problems as it involves a novel type of battery, among other new technologies.

“Production in Berlin and Austin reduce Tesla’s profitability in the short term, since manufacturing small batches of cars is inefficient. But this could be compensated with a further growth in the production of the plant in Shanghaithe company’s key profit center,” says Jefferies Analyst, Philippe Houchois. In addition, Tesla will no longer ship vehicles from China and Europe or pay the 10% tariff of the region on vehicle imports, although still importing chinese batteries.

Getting parts at reasonable prices is probably Tesla’s biggest challenge and could slow down the ramp, but it’s not the only one. the conflict is Ukraine has done set back the hopes of the industry of a strong recovery in vehicle production after last year’s semiconductor shortage. In any case, Tesla was less affected than most automakers by last year’s bottlenecks, in part because testers see it as a priority customer.

stumble in the opening

Like many of Musk’s plans, the Berlin factory arrived later than expected: It was supposed to open last July, only to face multiple bureaucratic hurdlesS. But the process was still quick by industry standards. Tesla announces the plant at the end of 2019 and construction arrives a few months later. While its Shanghai factory took half the time to build, most car plants will take longer.

For example, Volkswagen said in November that he would invest €2 billionequivalent to about 2,200 million dollars, in a new plant for electric vehicles near its headquarters in the German state of Lower Saxonybut construction won’t start until next year and production until 2026. Ironically, the new factory is about matching Tesla’s production speed: Volkswagen wants reduces the hours it takes to build a car from 30 to 10roughly what the new Berlin plant will be able to handle.

Tesla led the European electric vehicle market in 2019, but has since lost ground to local players. Last year he had a share of the 14% by sales, for 25% of the Volkswagen Group and 14.4% of the holdings of Chrysler, Stellantis, according to Schmidt Automotive Research. But it seems likely that the pecking order will change again with the production ramp in Berlin. “Tesla will surely be our most important competitor,” said the Volkswagen CEO Herbert Diessat the company’s annual news conference last week.

Electric vehicles represent approximately one in six light vehicles sold in Europe in the fourth quarter, a much higher proportion than in the US due to stricter emissions standards and government subsidies. But reconditioned automakers still sell them primarily to stabilize on the right side of the regulators, given the superior profitability of conventional cars. Tesla’s freedom from this restriction will be a key strength as production ramps up in the car’s historic home.

Tesla closed Tuesday’s session in the green at $993.98 and the location of the moving averages, the 70-period above the 200-period, would still give us a bullish signal. Meanwhile, practically all of the Ei indicators are bullish.

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