By Victoria Waldersee, Jan Schwartz and Nadine Schimroszik

BERLIN (Reuters:) As Tesla (NASDAQ) begins production at its German facility this month, Volkswagen(DE:) is still weeks away from finalising its plans for a 2 Billion Euro ($2.2Billion) electric vehicle factory. It hopes that the plant will allow it to keep pace with its U.S. counterpart.

Tesla claims it is able to produce a Model Y within 10 hours from its new Giga BerlinBrandenburg plant in Gruenheide, near Berlin. However, it takes Volkswagen almost three times longer to create its ID.3 electric vehicle.

German giant automaker Volkswagen is now trying to cut production times by using large-diamond casting techniques and decreasing the number of parts in their cars.

Christian Vollmer (VWP) stated that the Volkswagen brand’s goal was to “set the standard in production.” He spoke with Reuters during an interview. We have done something significant if we are able to get 10 hours.

Vollmer stated that the carmaker is improving its productivity by about 5% per year, but it must make bigger strides to maintain its lead in Europe, and that Vollmer did not give a percentage goal.

Volkswagen is the second largest carmaker in the world, behind Japan’s Toyota. It has a range of brands including Skoda and Seat, Volkswagen and Audi. Audi and Porsche have a 25% market share for the European electric vehicle market. Tesla holds 13%.

Tesla’s presence has made it more difficult for German carmakers, who must master and increase EV production. Herbert Diess, Volkswagen Chief Executive Officer has advised Germans to speed up in order to not be beaten.

“IGNITED THE DRIVE”

Volkswagen’s objectives align with a trend across the industry, simplifying product offerings and streamlining production. This is as carmakers try to raise the funds to transition to electric vehicles. Tesla has the advantage of not having to juggle the two.

McKinsey partner Evan Horetsky said that Tesla “reignited the drive to reduce part counts and make simpler products.” He was previously in charge of engineering at Tesla’s Brandenburg facility. Because they must maintain existing orders, legacy manufacturers face more challenges.

Tesla spokesperson stated that it uses two gigantic casting presses (or gigapresses) to produce Model Y models in Germany. This applies 6,000 tonnes of pressure for the rear end.

Gruenheide’s press shop is capable of producing 17 components in just six minutes. Tesla is currently working on six additional giga presses.

The spokesperson stated, “That’s why our speed is so great.”

Tesla popularized the giga-casting method that VW will adopt as an alternative to the labor-intensive way of making multiple stamped metal panels. These panels have crumple zones which absorb energy in a crash.

BMW, the German luxury vehicle manufacturer, rejected large-sized castings due to higher repair costs than the benefits of manufacturing.

But advocates say automated driving technology will reduce the frequency of accidents: “Tesla is designing a vehicle that most likely won’t be in a severe crash,” Cory Steuben, president of manufacturing consulting firm Munro & Associates, said.

‘HUMAN-ROBOT COOPERATION’

VW produces certain models like the Polo and Tiguan within 18 hours in Germany, while its electric ID.3 takes more than 30 hours to assemble. It is made by six different brands of Volkswagen vehicles in one factory.

Vollmer stated that multiple tasks will be reduced to one at the Trinity plant through automation. Vollmer also said it would reduce the overall size of the shop as well as the number of jobs that require uncomfortable manual labour. Vollmer described this expansion of “humanrobot cooperation”.

Volkswagen will not have giga presses in the Wolfsburg plant. Instead, it will use its Kassel factory to produce the goods and then transport them by train.

JPMorgan, an American investment bank (NYSE:), predicts that Tesla’s Gruenheide plant will make approximately 54,000 cars by 2022, 280,000 by 2023, and then 500,000 in 2025.

Volkswagen sold 452,000 batteries-electric cars globally in 2013, but has yet to set a production target for Trinity. Trinity will use the Scalable Systems Platform.

It aims to build 40 million vehicles worldwide on the new platform – which combines multiple internal combustion engine and electric platforms into one – with half of its global output all-electric by 2030.

Tesla has announced that the company plans to make 20 million cars a year this decade. That’s roughly half the Toyota annual production.

Tesla faces many challenges in Germany as it expands. These include securing water supply, environmental groups expressing concern about light pollution, congestion, and unions concerned about the management of Tesla and wage inflation due to workers from other countries.

Musk said, “Starting production can be nice. But volume production will take the hardest part.” He addressed a cheering crowd at an October 2021 festival held at the plant. It will be longer to achieve volume production than the time it took to construct the factory.

($1 = 0.8985 euros)