Tesla acquires German car manufacturer

The German site will be used as Tesla’s first manufacturing plant in Europe in an effort to increase production output

Tesla has entered into an agreement to acquire Grohmann Engineering, an automotive manufacturer in Germany, which will become Tesla Grohmann Automation, after increasing its output target to 500,000 cars per year by 2018.

Grohmann Engineering will serve as the initial base for Tesla Advanced Automation Germany headquarters, with other locations to follow. Tesla expects to add more than 1,000 advanced engineering and skilled technician jobs in Germany over the next two years. 

Several critical elements of Tesla’s automated manufacturing systems will be designed and produced in Germany to help advance its factories. Combined with the California and Michigan engineering facilities, as well as other locations to follow, the result is expected to yield exponential improvements in the speed and quality of production. It will also be reducing the capital expenditures required per vehicle, according to the company.

Tesla increased its production rate at its Fremont Factory in California by 400% in four years, and expects this acquisition to accelerate that growth rate. While the agreement is contingent upon clearance from regulators, including in Germany, the company expects to have full approval and close the acquisition in early 2017.

Tesla claims that accelerating a sustainable energy future is only possible with high-volume factories, allowing it to manufacture high-quality products with economies of scale, making products more affordable and accessible to the world.

This is Tesla’s first venture into manufacturing in Europe, having manufactured its electric vehicles solely in the US previously.