Tesla's 'Made in Germany': Musk sets up shop in Berlin
* Tesla to build factory, design centre in Berlin - Musk
* 'We lobbied for this for a long time' - state premier
* Thousands of jobs to be created in Berlin area - official
* Brexit uncertainty played role in picking Germany - Musk
(Adds detail about Brexit in paras 15 and 16)
By Edward Taylor and Paul Carrel
BERLIN, Nov 13 (Reuters) - Tesla will build its
first European factory and design centre near Berlin, giving the
U.S. electric car pioneer the coveted "Made in Germany" label
just as local rivals Audi, BMW and Mercedes prepare to launch
Tesla Chief Executive Elon Musk announced the move at a
prestigious German car awards ceremony late on Tuesday and said
the new plant would make batteries, powertrains and cars -
starting with the Model Y sports utility vehicle.
"Everyone knows German engineering is outstanding for sure.
You know that is part of the reason why we are locating
Gigafactory Europe in Germany," Musk said at the ceremony in
The plan is a big boost for Germany as a centre for
manufacturing after BMW and Mercedes in
recent years chose to build new factories in Hungary, and after
its auto industry was hit hard by Volkswagen's
admission in 2015 that it cheated U.S. diesel emissions tests.
Germany's powerful manufacturing industry has been slowing,
with data on Thursday set to show whether Europe's biggest
economy has slipped into recession for the first time since
Tesla is struggling to ramp up production and has yet to
prove it can be consistently profitable as rivals including
Audi-owner Volkswagen retool plants to mass produce electric
Musk said the factory would be near Berlin's new Brandenburg
international airport, diversifying the Silicon Valley firm's
production beyond the United States at a time when global trade
tariffs make exports more difficult. Besides Europe, Tesla is
opening a factory in Shanghai.
Tesla's proposed factory will be within commuting distance
of Poland, where labour costs are cheaper, a rival manufacturer
- who also looked at the site - told Reuters.
"Tesla's decision to build an ultra-modern factory for
electric cars in Germany is further proof of the appeal of
Germany as an automotive hub," Economy Minister Peter Altmaier
said on Wednesday.
"We think we now have the chance, in the coming years, to
become an important international centre in this future-oriented
sector," he said.
The German government has earmarked financial support for
making electric car battery cells locally as a way to secure
manufacturing jobs as tougher emissions rules threaten demand
for older technologies, like diesel engines.
Dietmar Woidke, the premier of the Brandenburg state that
surrounds Berlin, said any official support given to Tesla would
be in accordance with European Union rules.
Altmaier said there had been no discussion so far about any
subsidies for Tesla's plans, adding the company would be treated
like all other carmakers.
'SETS AN EXAMPLE'
In a high-profile example of the impact of Brexit, Musk said
he picked Germany for his new factory over Britain because of
uncertainty over the nation's exit from the European Union.
"Brexit made it too risky to put a gigafactory in the UK,"
he said in an interview with industry website Auto Express.
Germany's biggest labour union, the influential IG Metall,
was quick to welcome Tesla's plan. "This strengthens Berlin as
an industrial location and creates jobs. We hope this sets an
example," said Birgit Dietze, IG Metall's regional head.
Even Germany's auto industry association, VDA, welcomed the
arrival of a U.S. competitor.
"Elon Musk's announcement shows how important Germany is as
a location for producing electric vehicles in Europe," VDA said.
"We don't shy away from competition, quite the opposite."
German carmakers and suppliers are preparing to build more
than 150 electrified vehicles by 2023, VDA said.
While Germany's renowned car industry is mainly based in the
south of the country, the capital has become a hub for start-ups
and has attracted many creative and technology firms since the
fall of the Berlin Wall three decades ago.
"Tesla is coming to Brandenburg with a big investment," said
state premier Woidke, without giving details "We lobbied for
this for a long time in intensive talks and with good
Berlin's minister in charge of economic affairs, Ramona Pop,
told public broadcaster RBB there had been talks about creating
6,000 to 7,000 jobs in production alone, with hundreds or even
thousands more in areas such as design, software and research.
Musk's appearance at the awards ceremony is another example
of Tesla's efforts to give its cars the German stamp of quality.
It already has an engineering firm in Pruem that specializes
in automated manufacturing systems for battery factories and has
tested its cars on the Nordschleife, the notorious northern loop
of the Nuerburgring racing track.
(Reporting by Edward Taylor in Frankfurt, Paul Carrel, Michelle
Martin, Chris Steitz, Rene Wagner, Thomas Seythal and Christian
Kraemer in Berlin, Yilei Sun in Beijing and Ayanti Bera in
Bengaluru; Editing by David Clarke and Mark Potter)
First Published: 2019-11-13 01:15:15
Updated 2019-11-13 16:56:30
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