Tesla Gigafactory Berlin Is Officially OPEN!

Tesla’s Giga Berlin factory is now fully approved, certified and producing vehicles that they will be delivering to customers beginning on March 22nd. This is the most advanced auto manufacturing plant in Europe. Probably one of the most advanced manufacturing facilities of any kind in the entire world. This is how Tesla begins to flood the European market with their vehicles and get one step closer to becoming the biggest automaker in the world.

But this has not been an easy road to opening Giga Berlin. It’s actually been preposterously difficult for Elon Musk and his company to make this happen. We all know that Germans are naturally very meticulous with high standards. But even Elon himself didn’t expect the outcome he got after going toe to toe with the German bureaucracy. Still, Tesla overcame it. So today we’re getting into the story of Giga Berlin on the eve of its very first customer deliveries, and we’ll talk about why this is more than just another car factory.

Giga Berlin Approved

The state of Brandenburg Germany approved the construction of Tesla's first electric car factory in Europe on March 4th 2022. But, the construction of the factory began in late May of 2020. Tesla were able to build this entire plant based on a series of 20 pre approvals given by the State of Brandenburg, which is the jurisdiction that Giga Berlin actually falls under, it’s not technically in the city that it’s named for, just a close by suburb called Grünheide - but obviously Giga Grünheide or Giga Brandenburg don’t carry the same weight for an international market.

Anyway, the way these approvals work is crazy. Tesla were allowed to start building a factory based on the pre-approvals, but they aren’t allowed to open the factory without final approval - so they do this at their own risk. The consequence of not obtaining that final approval being that they would have to literally disassemble the entire factory and return the land to its original state - not even an exaggeration, that’s what the German law says. They don’t mess around.

However that outcome was highly unlikely the entire time, and Elon Musk predicted a swift construction and set up process that would get Model Y vehicles rolling off the assembly line in July of 2021. Now here we are in March 2022 and Elon is finally making plans for his first delivery party just weeks after the state officials finally gave their rubber stamp to the entire operation.

In an official statement, they wrote, “The project, which was approved with the 536-page decision, includes the plant for the production of up to 500,000 vehicles per year, aluminum smelting plants and an aluminum foundry, plants for surface treatment, heat generation, and storage. The facility also includes battery cell production, an operational wastewater treatment plant, a fire brigade equipment house, a high-bay warehouse, as well as laboratories and workshops.”

The approval documents for Giga Berlin, together with the associated application documents, expert opinions and statements, comprise more than 23,727 pages across 66 folders.

So, all of that stuff that Tesla already built is now allowed to stay where it is. What a system. Though, by comparison to some other major projects around Berlin, Tesla got off pretty easy. The new Berlin airport finally opened in 2021 after being delayed by over a decade. Yeah. And the planning process for the airport first started 30 years ago. So, that’s how they do things around here.

But this experience with Tesla might actually become a catalyst for change in the German system. It seems that officials have realized that if they want major investments from international companies, then there is going to need to be a compromise on the process. Brandenburg Minister of Economic Affairs, Jorg Steinbach, who has been a champion for Tesla throughout this entire process, made a statement following the GigaFactory’s final approval, saying, “A company should not be penalized if it makes improvements in the process and at the same time heals deficiencies in the original proposal.” 

He’s referring to some late developments by Tesla that caused the process to go on as long as it did. The approval process was delayed in 2021 because Tesla chose to add a battery cell production building to the application for the factory. Making that one change triggered a whole new round of public consultation that gave voice again to Tesla’s many critics in the area, who were then allowed to speak at public hearings and file lawsuits through the German court. The system does not allow any changes to be made to the proposal without triggering a new round of public consultations and hearings. Steinbach admits that without all of the backtracking, the approval could have been granted within a year and half of construction, which would have been summer 2021. Steinbach believes that future projects in the Berlin area will move faster thanks to lessons learned with Tesla. This sentiment goes all the way to the country’s national government, with the leader of the Green Party in Germany, Robert Habeck, saying that construction of projects focused on renewable energy in the country should be done with "Tesla speed."

The Critics

The entire story of Giga Berlin has been an ongoing back and forth between Tesla, and environmental crusaders in Germany who would prefer that no factories get built, ever. Even if they are factories that make electric cars which have a net benefit for the environment as a whole. These aren’t ‘big picture’ people.

The first push backs were against Tesla cutting down trees to make space for the construction - so Tesla promised to replace every tree they cut down with three new trees, and they set the goal of building back a better quality and more natural forest than the one that they cut down. The site for Giga Berlin was a human made forest that was planted entirely for the purpose of being mulched up and turned into cardboard boxes, so every tree was the same and they were planted in a very industrial style. 

Then there were the bats. Locals pointed out that the construction site was home to an endangered species of bats. Tesla construction would have coincided with mating season for these bats, and disturbing that cycle would have been destructive to the species. In order to resolve this, Tesla were able to relocate the bats to an alternative location while they were still in a late winter hibernation state.

Then it was lizards and snakes. In December 2020 Tesla had to halt construction of the factory because they risked disturbing hibernating lizards and snakes. Again, the animals had to be very carefully relocated. They were asleep, so it was presumably fairly easy.

And there was the water - some people were very afraid that the GigaFactory would use too much water from the Brandenburg reservoirs. And fair point, factories like this that make giant high tech products at the industrial scale do use a lot of water. Giga Berlin will probably use as much water as a small city just in its first phase of opening, and that usage will probably more than double by the time it is fully up and running at max capacity. It actually took until just this week for Tesla to get approval to use local water - the factory had been approved, but it had not been cleared for industrial water use due to ongoing protests and objections. 

But that’s all clear now. And production is rolling as we speak.

Giga Berlin Production

Here’s what we know about vehicle production at Giga Berlin. Test production of the Model Y as of March had reached 100 units per day at max productivity - suggesting a 500 unit per week run rate once the factory is up and running. We know that the aim is to reach 1,000 cars per week by the end of April.

Tesla is building the Model Y Performance variant right now. These are being constructed with the standard 2170 battery pack that is being supplied to Germany by Tesla China. And these German Tesla’s will feature both front and rear giga castings. We can already see hundreds of them lined up in parking lots outside the factory, just meticulously parked in perfect straight lines, as you would expect from a German crew. These are mostly black, with a few white here and there, so we still have no clear image of the new paint colours that are expected to come from this GigaFactory.

We know that 30 vehicles will be delivered at the event on March 22nd. And we’ve heard that all 30 of these cars were built on March 14th. The hundreds of vehicles built since approval came through will be shipped out to customers before the end of March.

There are currently 2 Gigapress machines up and running on the production floor, with two more presses being installed right now. Each press can fabricate 2,500 castings per week, and at two per car, that would be 1,250 vehicle capacity per press. Tesla will need a total of 8 Gigapress machines running to meet their ideal rate of 10,000 vehicles per week.

Second production shift is expected to be added June 2022 to ramp up vehicle output, building cars all day and all night.

Then, production is expected to shut down for a three week period at some point in the second half of this year, and the reason for that is to retool the line for 4680 battery and structural pack integration. During the three week shutdown of vehicle production, resources will be allocated to the cell and pack manufacturing plant to stockpile supply of the next generation batteries.

Giga Berlin won’t be a typical ramp up for Tesla - they’ve learned a ton from experience in the Shanghai ramp, and Tesla already knows how to make the Model Y very well, it’s become their best selling vehicle. So byt the end of this year, with 4680’s and structural packs going strong, it wouldn’t be crazy to imagine the factory hitting a run rate of over 100,000 cars per year.

​​Herbert Diess, the CEO of Volkswagen, actually posted on his LinkedIn that VW has no chance of competing against Tesla without the company’s new Trinity factory in Wolfsburg Germany coming online. What Diess doesn't mention is that if all goes well, the first car will be delivered from VW’s Trinity in 2026 - so that’s 4 years for Tesla to outperform Volkswagen on their own turf.

Tesla Drop

And in order to get those cars out to eager customers as soon as possible, Tesla has introduced a new service in Germany called Tesla Drop. This allows for vehicle delivery outside of regular business hours, so customers don’t have to get their car from a delivery centre between 9 and 5. Tesla Drop delivery service allows customers to arrive at the delivery centre where the car is parked, locate and open their car via the Tesla app, inspect the vehicle for defects, document the pickup in their Tesla account and then simply drive away in their new Model Y. How nice is that, to be able to literally purchase and collect a car without even having to talk to one person. It’s a millennial’s dream, we hate talking to people - and this kind of service is going to decimate traditional dealership models where you have to contend with an army of sales and finance people trying to screw you over every chance they get.

So, there it is. We finally have closure on the saga of Giga Berlin that we have been covering literally for the entire life of this channel - I feel like we’ve grown along with this factory. Now, how bullish are all feeling on Berlin production numbers? Two big questions: how soon do they transition to 4680 structural packs? And what run rate do they hit by the end of this year, 100k? 150? Can they do 200,000 vehicle run rate?