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Tesla CEO Elon Musk opens electric vehicle plant

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Elon Musk is the SpaceX founder and Tesla CEO.

Michele Tantussi | Reuters

Elon MuskOfficially opens Tesla’sThe company opens its first European manufacturing plant on Tuesday, as it seeks to relieve the pressure from other U.S. factories and China.

The Tesla CEO will cut a red ribbon at the new Giga Berlin (or Gigafactory Berlin-Brandenburg) plant in Grünheide, a coal town in Brandenburg, Germany, within commuting distance of the capital.

Tesla envisions that the Berlin plant will produce up to 500,000 cars annually.

Tesla’s ability to meet demand has been difficult and Tesla Model Ys are experiencing delays.

This week Tesla had to temporarily shut production at its Shanghai plantCovid-19 cases have seen a resurgence in China. There was a two-day delay in the production of Model 3 and Model Y made-in China vehicles.

Tesla began exporting vehicles from China in recent quarters to European customers.

Tesla is still seeing high demand in Europe for EVs. Now, Tesla has some manufacturing capacity on the continent and can not rely solely on China.

Giga Berlin is a project that has been in development for many years. This is vital to Tesla’s global expansion plans. opening of its Gigafactory 3 plant in Shanghai in late 2019. Recently, another Austin plant was opened by the company.

The November 2019 issue of Musk announced plans to build a car plant in GermanyHe praised German engineering.

He stated that “Everyone is aware of the excellence in German engineering.” This is why our Gigafactory Europe will be located in Germany. Berlin also has the finest art and engineering centers in the world. 

German authorities gave Tesla conditional approvalTo start production March 4.

After months of delays, the conditional license was granted for Brandenburg’s vehicle and its battery plant. Tesla intended to begin production in the early summer 2021. the Covid pandemicSupply chain issues and disputes with environmentalists have slowed the company’s growth.

Do you need a Thirsty Factory?

The plant has been up and running for a while, but water consumption remains a problem.

Deutsche Banke’s auto sector analysts stated Monday in a research paper that “The effect on the local water supply remains to be of concern for the future” To truly increase volume, Tesla must show evidence of proper water use and pollution control.

Sources indicate that the company might exhaust all the available water resources in the region by the end of the first phase of the plant’s build-out. Therefore, the note states that additional extraction permits are required to increase its future capacity.

Tesla should have enough stock to reach its initial 500,000 volumes, however, the company may encounter additional obstacles as it plans on increasing each of its Gigafactories by 1,000,000 units annually.

—Additional reporting by CNBC’s Lora Kolodny.

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