Dancing Musk hands drivers the first Teslas from the new German gigfactory

GRENHEIDE, Germany, March 22 (Reuters) – Elon Musk was greeted as he supervised the delivery of a Tesla. (TSLA.O) The first German-made cars arrived at its plant in Gruenheide on Tuesday, marking the US automaker’s inaugural European position just two years after it was first announced.

Loud music played as 30 customers and their families got their first glimpse of their gleaming new cars through an alluring, neon-lit Tesla-branded tunnel, clapping and cheering while Tesla CEO Musk danced and joked with fans.

“This is a great day for the plant,” Musk said, calling it “another step toward a sustainable future.”

Although German Chancellor Olaf Scholz, who also attended the event, hailed the giant plant as the future of the auto industry, he faced opposition and some environmental activists blocked the entrance to the plant while displaying signs indicating its high water consumption. Read more

Two protesters retreated from a sign on the highway near the factory, blocking traffic for hours after the event.

Musk had hoped to start production from the plant eight months ago, but licensing delays and local concerns about the plant’s environmental impact have hampered the process.

Telsa had to serve European orders from Shanghai while it waited for its German license, driving up logistics costs at a time when it was grappling with industry-wide chip shortages and other supply chain disruptions.

It got the final green light from local authorities on March 4 to start production in Germany, provided it met conditions ranging from water use to air pollution control.

Racing with Volkswagen

New owners received a Model Y Performance configuration, a vehicle that costs 63,990 euros ($70,491) with a range of 514 kilometers (320 miles), Tesla said, adding that new orders from the factory could be delivered from April.

Tesla said about 3,500 of the plant’s expected 12,000 workers have been hired so far.

At full capacity, the plant will produce 500,000 cars a year, more than the 450,000 battery-electric cars produced by German rival Volkswagen. (VOWG_p.DE) Sold globally in 2021.

It will also generate 50 GWh of battery power, surpassing all other factories in Germany.

For now, Volkswagen still holds the inside track in the race to electrify fleet Europe, with a 25% market share versus Tesla’s 13%. Musk said it would take more time to ramp up production than the two years it took to build the plant. Read more

JPMorgan predicts that Gruenheide will produce about 54,000 vehicles in 2022, rising to 280,000 in 2023 and 500,000 by 2025.

Volkswagen, which received 95,000 electric car orders in Europe this year, is planning a new €2 billion electric vehicle plant along with its existing facility in Wolfsburg and six battery plants across Europe.

But its schedule is behind Tesla’s, with an EV plant due to open in 2026 and the first battery plant in 2023.

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(Reporting by Victoria Waldersi and Nadine Shamroshik) Editing by Jan Harvey, Edmund Blair, Alex Richardson and Alexander Smith

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