Tesla, Inc. (TSLA.US) plans to start production of batteries in Germany in 2027, expanding its manufacturing footprint in Europe.

According to reports, Tesla, Inc. (TSLA.US) plans to start battery production at its factory outside of Berlin as early as 2027. The report states that the only European electric car factory owned by Elon Musk is preparing to achieve a battery production capacity of up to 8 gigawatt hours per year, which will change the existing model of manufacturing components in Germany but importing finished batteries from the United States. The planned capacity will be able to meet the assembly needs of 130,000 electric cars per year. Tesla, Inc.'s expansion comes at a time when the European Union is adjusting its policies to promote electrification. After several months of industry pressure, the European Commission has decided to relax the regulation that was set to ban the sale of new fossil fuel vehicles starting in 2035, providing more flexibility for car manufacturers to transition to clean energy fuels. In response, Tesla, Inc. is increasing its manufacturing footprint in Europe. To fully launch the battery production line, Tesla, Inc. plans to invest a nine-figure sum in the factory to upgrade existing infrastructure. Since the opening of the Gruenheide electric car factory in 2022, Tesla, Inc. has already invested billions of euros there. Tesla, Inc. revealed that it may consider concentrating the entire battery industry chain at the Gruenheide base in the future if conditions are right. However, the current European battery production faces intense competition from Chinese and American manufacturers, making profitability difficult. Additionally, Europe still lags behind China in terms of large-scale battery production capacity construction. It is worth noting that Tesla, Inc.'s European business is facing multiple challenges: lagging product updates, controversy over Musk's political stance (including support for the German far-right party Alternative for Germany and involvement in the Trump administration), and disagreements with European regulatory agencies over the positioning of their "Full Self-Driving" (FSD) system, all of which have led to a decline in Tesla, Inc.'s sales in Europe.