- Tesla plans a further $250 million investment at its Gruenheide, Germany, facility to expand battery cell production, targeting 18 GWh annual capacity.
- The funding will accelerate vertical integration of battery cell manufacturing in Europe, supporting Tesla's regional supply chain resilience.
- The announcement comes amid rising European competition for local battery production and policy support for domestic clean-tech manufacturing.
Tesla deepens German battery bet
Tesla is committing an additional $250 million to its Gruenheide plant near Berlin, aiming to boost annual battery cell production to 18 gigawatt-hours. The investment underscores the automaker's push to localize cell manufacturing in Europe and reduce reliance on Asian suppliers.
According to a person familiar with the plan, the new funding will be used to outfit expanded production lines and integrate additional steps of the cell manufacturing value chain on site. The target production volume could power roughly 300,000 mid-range electric vehicles annually, based on typical pack sizes.
The expansion builds on Tesla's earlier multi-billion-euro investment at Gruenheide, which already houses vehicle assembly and battery component lines. The company has faced regulatory hurdles and local environmental protests in the past but has secured permits for phased expansions.
"Local cell production is critical for cost control and supply stability," said one analyst who follows Tesla's operations. "Germany offers incentives and an industrial base that align with Tesla's long-term goals."
Tesla's move comes as European automakers and battery makers race to build out regional gigafactory capacity, spurred by EU policies targeting reduced import dependence. However, the U.S. Inflation Reduction Act and aggressive Chinese expansion pose competitive challenges. Tesla did not respond to a request for comment on the timeline for the new capacity.
Correction: An earlier version of this article misstated the investment figure. The correct figure is $250 million.