Volkswagen CEO Herbert Diess praised Elon Musk for showing that electric cars are capable of competing with vehicles powered by fossil fuels. Volkswagen has announced plans to invest €30 billion (US$33 billion) to electrify its entire product lineup over the next four years.

By Ian Horswill


Posted on November 14, 2019

Tesla said it will build “batteries, powertrains and vehicles, starting with Model Y” at a new manufacturing factory on the outskirts of Berlin in Germany.

The announcement that Tesla is to be built in Germany comes less than three weeks after Tesla CEO Elon Musk said it was starting trial production of cars in China.

“We’ve decided to put the Tesla Gigafactory Europe in the Berlin area,” he said. “I come to Berlin a lot – Berlin rocks!”

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Tesla Model Y Elon Musk
The Tesla Model Y that will be manufactured in Berlin.

“Some of the best cars in the world are made in Germany, everyone knows that German engineering is outstanding,” said Musk. “That’s part of the reason why we’re locating our Gigafactory Europe in Germany.

“We are also going to create an engineering and design centre in Berlin.”

The Berlin factory, to be built near the planned new airport, is also expected to make the Tesla Model 3, the US electric vehicle manufacturer’s best-selling car, CNN reported.

Germany’s Economics Minister, Peter Altmaier, was naturally delighted to have Tesla as a ratepayer.

“The decision by Tesla to build a highly modern factory for electric cars in Germany is further proof of the attractiveness of Germany as an automotive manufacturing base,” he said in a statement.

In an interview with Auto Express, Musk said that the UK, another major European base for global carmakers, was unviable because of Brexit.

“Brexit [uncertainty] made it too risky to put a Gigafactory in the UK,” Musk said.

Tesla Model 3
Tesla’s best-selling car, the Model 3. Photo: Tesla

Tesla has already posted vacancies for construction, operations, engineering and manufacturing workers for the Berlin factory. It has not given any further information.

Musk came face-to-face with his main rival in Germany, Volkswagen CEO Herbert Diess, when he appeared onstage at The Golden Steering Wheel Awards in Berlin, where Tesla Model 3 was given an award.

Diess praised the billionaire entrepreneur Musk for showing that electric cars are capable of competing with vehicles powered by fossil fuels. Diess also eluded to the looming competition between the carmakers.

“I’m happy that Elon is pulling us, but I think the German industry is really now strongly investing — and we will keep you alert,” Diess told Musk.

Volkswagen has announced plans to invest €30 billion (US$33 billion) to electrify its entire product lineup over the next four years. The world’s largest carmaker has begun making its new ID.3 electric vehicle series and recently announced a deal with Sweden’s Northvolt to build a giant battery factory in Germany. One of the group’s luxury brands, Audi, is already building electric SUVs that are designed to appeal to potential Tesla buyers.

On Wednesday, Volkswagen broke ground on an expansion of its plant in Chattanooga, Tennessee, that will allow electric cars and battery packs to be produced from 2022.

Musk’s first manufacturing plant is in Reno, Nevada, with a second planned for Buffalo, New York. The third is nearing completion near Shanghai in China.