Germany and Netherlands Both in Running for European Tesla Gigafactory

Where will Tesla build its European location? 

by James Dennin

While Tesla assembles most cars in its Fremont, California headquarters, the biggest markets for electric cars are actually outside of the United States. That explains the swirl of speculation about the possible location for future Gigafactories — massive factories that produce both Tesla cars and Tesla batteries — to will serve the Asian and European markets.

Earlier this month, Tesla announced that its Chinese location would be in Shanghai, with plans to ramp up to producing roughly 500,000 cars annually within two years of receiving its finalized permits. That news followed reports that the brewing trade dispute between the US and China had already led to price hikes for Tesla vehicles in China, which at present have to be imported.

As for the European location, a recent Wall Street Journal report indicates that discussions are centering on two countries, Germany and the Netherlands, with officials in both countries telling WSJ that discussions about building a Tesla Gigafactory had taken place. The Dutch official declined to say whether or not talks were ongoing, suggesting that Germany may be emerging as the frontrunner.

That would jibe with comments made by CEO Elon Musk in a recent Twitter discussion, where Musk said that Germany is “a leading choice for Europe,” adding that he was particularly looking for locations along the French-German border near the wealthy “Benelux” countries of Belgium, Netherlands, and Luxembourg.

Where Will Tesla Build Its European Gigafactory?

Discussions are still in pretty early stages, according to the WSJ’s reports, but two German states in particular, Rhineland Palatinate and Saarland near the French border, have been vocal about their Tesla courtship. The WSJ also notes that Tesla recently acquired a robotics company in Rhineland Palatinate, which supplies machinery to its Nevada Gigafactory.

A Dutch spokesman for the nation’s economics ministry also told WSJ that discussions about building its Gigafactory there were underway (the Netherlands is already the home of Tesla’s European headquarters.)

As has been the case in the US, Tesla already dominates the European luxury market, but has to scale up production of the Model 3 in order to find success in the mass market. Elektrek reported earlier this year that the Model S and the Model X were already outselling some gas-powered German cars on the premium market.

This of course all comes ahead of Tesla’s earnings call on Wednesday, which is expected to be a bit of a blockbuster. Among other things, Elon Musk is expected to answer tough questions about the production ramp up for the Model 3 and may end up squaring off against some of the company’s short sellers, which has happened in the past.

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