Published: Thu, November 14, 2019
Markets | By Otis Pena

Tesla China Model 3: Tesla Model 3, made in China, unveiled

Tesla China Model 3: Tesla Model 3, made in China, unveiled

Mr Musk made the announcement at an awards ceremony in Germany on Tuesday.

Some background information released by Tesla on the new plant said it would produce both the Model Y and Model 3 and would be a "first phase" for expansion plans on the continent.

A German vehicle industry source told AFP they were relaxed about Tesla's announcement, hoping the competitor's arrival would accelerate the country's electric transition. Speaking to Auto Express, he said that Brexit did play a role in Tesla choosing Germany as the location of its gigafactory. The site could become one of the global industry's more profitable auto plants, and a locally built Model 3 could drive earnings and cash flow enough to bring Tesla close to Morgan Stanley's US$440-a-share bull-case valuation. Tesla said it would build its next factory near Berlin, along with an engineering and design center.

'Everyone knows that German engineering is outstanding and that's part of the reason we are locating our Gigafactory Europe in Germany, ' he said on stage.

Musk also joked that the factory would need to get started more efficiently than the nearby Berlin-Brandenburg Airport has done.

Germany's biggest labour union IG Metall welcomed Tesla's plan.

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Negotiations went on in secret with Tesla for five to six months, according to Brandenburg state premier Dietmar Woidke.

Christian Hochfeld, head of clean mobility think tank Agora Verkehrswende, called Tesla's decision "a huge gain for the mobility transition and the transformation of the German vehicle industry".

Officials in Germany hope the plant could create as many as 7,000 jobs in production with many more in research and design.

Batteries are made in Nevada and then shipped to Tesla's vehicle factory in Fremont, California, for final assembly.

That said, it wasn't clear if it will be counted as in the city or will just be near Berlin.

German supplier-giant Bosch said previous year that it was not going to invest in battery-cell development. It will compete with electric cars from local contenders such as NIO Inc. and Xpeng Motors, as well as global manufacturers including BMW AG and Daimler AG.

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