About 50% of the world's EV batteries are currently made by Tesla

Tesla’s announcement to build a “gigafactory” for electric vehicle production in Germany is likely to speed up the slow shift to electric mobility in the country, politicians and mobility experts have said.

Media called the announcement a “head-on attack” on the country’s mighty carmakers BMW, Daimler and VW that will force the trio to speed up their shift from combustion engines to electric propulsion.

A strong local supply of renewable energy was key for Tesla’s the investment decision, according to the regional government.

Tesla’s decision to build its first European “gigafactory” for batteries and vehicles in Germany will be an enormous boost for the country’s lagging shift to electric mobility, politicians and mobility experts said.

Economy minister Peter Altmaier called the surprise announcement by Tesla CEO Elon Musk during an award ceremony in Berlin a “milestone” for the roll-out of electric mobility and the production of battery cells in the country.

He said the investment will “enhance Germany’s status as an automobile industry location on an international level.”

“We now expect to have the chance to become an important international centre for this future field,” Altmaier said in in a press statement.

Transport minister Andreas Scheuer said on Twitter Musk had made “a very good decision.” Scheuer posted a photo showing him and the Tesla CEO and argued Musk would find “the best engineering knowledge in the world” in Germany.

Musk said his company “will build batteries, powertrains and vehicles, starting with [the electric compact SUV] Model Y” in the new factory to be located just south-east of Germany’s capital Berlin. Several European countries, as well as many locations within Germany had tried to attract Tesla.

The factory will be located in the German state of Brandenburg, an economically relatively weak region that produces a lot of renewable energy, but will also be affected be the country’s coal exit because it is home to a lignite mining region.

Musk also said his company will build an engineering and design centre in neighbouring Berlin. The capital of “Green Energy Valley” Germany has become a hub for sustainable mobility and digital start-ups in recent years.

Unnamed sources told the local newspaper Potsdamer Neueste Nachrichten the investment will be worth billions of euros and create around 10,000 jobs in the region.

“A huge gain for the mobility transition”

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 car industry.”

He added: “Tesla puts German carmakers under pressure in the shift to green mobility and will give them a run for their money.”

This view was echoed by media reports. Mobility newsletter Tagesspiegel wrote the decision means “the e-car pioneer long laughed at by German competitors is attacking Volkswagen, Daimler and BMW head-on on their home market – as a producer, employer, engineer.”

After dithering about the shift to electric mobility for years, Germany’s largest car groups BMW, Daimler and VW have recently announced investments worth dozens of billions of euros in the technology.

But the uptake of electric cars only gathers pace slowly, forcing the government to give up on its target to have one million electric cars on the road by 2020.

As a result of this indecision, the popularity of powerful SUVs and policy neglect, Germany has not managed to lower emissions in the transport sector at all during the past decades.

But clean mobility experts stress that sustainable mobility will require much more than the roll out of electric vehicles – for example a shift to public transport, cycling and other forms of zero-emission mobility.

Ramona Pop, the Green Party economy Senator (minister) of the city state of Berlin, also told public Radio RBB that she hoped Tesla‘s move would spur the shift to clean, digital mobility in the country. The competition should motivate the German car makers to speed up, she said.

VW CEO Diess, who was present at Musk’s announcement, thanked him for “pushing us” towards electrification.

Under Diess’ leadership, the world’s largest carmaker has placed a huge bet on the mass breakthrough of electric cars by embracing the technology more vigorously than any other major auto company.

The plan could turn diesel pariah VW into a “game-changing” pioneer, environmental NGOs have said. VW started production of its first purely electric model ID.3 earlier this month.

Asked why German carmakers were behind in electrification, Musk replied: “I don’t think Germany is that far behind,” adding that some of the best cars in the world are made in Germany.

“Everyone knows that German engineering is outstanding and that’s part of the reason we’re locating our gigafactory Europe in Germany,” Musk said.

Brandenburg state premier Dietmar Woidke said the region’s strong renewable power production – the highest generation per capita in Germany – had been a decisive factor in negotiations with Tesla.

“These are excellent news for our state,” Woidke said in a press release. The “big investment” by the US carmaker would give the region “a boost as an international and innovative location and bring good work to many people.”

First published by Clean Energy Wire. Reproduced under Creative Commons license.


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