Tesla buying German engineering firm to boost production output

Formation of the new 'Tesla Grohmann Engineering' could help Tesla to meet its lofty production targets

Tesla Model 3 twin

Electric vehicle manufacturer Tesla Motors has announced its acquisition of German technological firm Grohmann Engineering, as part of its mission to increase automobile production to half a million annual units by 2018.

Tesla, which currently produces fewer than 100,000 vehicles per year, currently faces a unique challenge as it attempts to ramp up production at its manufacturing facilities to meet demand – most notably for the more affordable Model 3 electric car, set to arrive in 2018.

By entering into an agreement to acquire Grohmann – for the formation of Tesla Grohmann Engineering – the Californian firm will make use of the German company’s expertise in advanced engineering and automated manufacturing methods.

In effect, Grohmann won’t help Tesla build cars, so much as build the machines that will be used to build cars. As Tesla puts it, at very high production volumes ‘the factory becomes more of a product than the product itself’, its factories commanding ‘an order of magnitude more attention in engineering than what they produce’.

> More: Full review of the Tesla Model S electric car

Over the past four years Tesla has managed to increase its rate of production at its Fremont factory by 400 per cent, but requires an even steeper growth kerb in order to meet demand for its future products.

The company’s Nevada-based battery ‘Gigafactory’ will supply batteries for those upcoming vehicles, but currently the company is not placed to meet demand for the cars themselves. The Model 3, announced back in March 2016, has attracted more than a third of a million reservations so far – a third more than Tesla’s total cumulative Model S and Model X sales so far.

More advanced, higher-output production facilities will also enable Tesla to attain suitable economies of scale, in turn helping the company meet its projected $35,000 starting price – around £28,000 at current exchange rates.

While the deal hasn’t yet been sealed – it’s still subject to approval from regulators in Germany – it expects to close the acquisition in early 2017. From there, Tesla says it expects to add over 1000 advanced engineering and skilled technician jobs at the German location, in Prüm, over the next two years.

Tesla is still taking £1000 deposits in the UK for the Model 3, which is expected to appear by mid 2018.

Recommended

2023 Lotus Eletre SUV makes public debut
Lotus Eletre
Lotus

2023 Lotus Eletre SUV makes public debut

Get ready for the most advanced, biggest and heaviest Lotus there has ever been; the all new Eletre SUV is taking its maker global
25 Jun 2022
McMurtry Spéirling fan car eyes Goodwood FoS hillclimb record
McMurtry Spéirling
Electric cars

McMurtry Spéirling fan car eyes Goodwood FoS hillclimb record

The McMurtry Spéirling is aiming to dethrone the Volkswagen ID R as the fastest car to complete Goodwood hillclimb
24 Jun 2022
Ford Pro Electric SuperVan debuts – 1972bhp van to complete Goodwood hillclimb
Ford Pro Electric SuperVan – front quarter
Ford

Ford Pro Electric SuperVan debuts – 1972bhp van to complete Goodwood hillclimb

The Ford SuperVan is back, but with batteries instead of a race engine…
23 Jun 2022
​Polestar 5 gunning for Porsche Taycan Turbo with 871bhp flagship
Polestar 5 powertrain – front quarter
Polestar

​Polestar 5 gunning for Porsche Taycan Turbo with 871bhp flagship

Still think Polestar’s just a Volvo offshoot? The 871bhp Polestar 5 will probably change that
23 Jun 2022

Most Popular

2022 BMW M3 Touring revealed – the Audi RS4 rival we've been waiting for is here!
FOS M3 Touring
BMW M3 Touring

2022 BMW M3 Touring revealed – the Audi RS4 rival we've been waiting for is here!

Wagon lovers rejoice, the new BMW M3 Touring is here exclusively in xDrive Competition specification
21 Jun 2022
New McLaren P1 Spider revealed
Lanzante P1 Spider – front quarter
McLaren P1

New McLaren P1 Spider revealed

McLaren specialist Lanzante unveils bespoke P1 Spider commission at Goodwood Festival of Speed
23 Jun 2022
Goodwood Festival of Speed 2022
FOS Header
Goodwood Festival of Speed

Goodwood Festival of Speed 2022

The UK’s biggest automotive event is back for another year. Here's our show guide
24 Jun 2022