Photo: Tesla |Edited
Tesla planned to produce the Model Y’s batteries in a new production facility near Giga Berlin. The IRA incentives offered in the U.S. to battery makers upended initial plans, and Tesla considered importing the batteries into Germany more profitable. Nevertheless, a new report from Giga Berlin indicates that Tesla is making at least some battery components in Gruenheide.
Unlike the so-called “legacy” carmakers, who outsource almost every component to external partners, Tesla aims to produce in-house as much as possible. The level of vertical integration at Tesla is just staggering, as the EV giant makes almost all the parts that go into its vehicles. This gives it more control and allows it to use custom-designed components for the most critical parts. By contrast, traditional carmakers use off-the-shelf components, sometimes needing to adapt them for their purpose.
Time showed us that Tesla’s approach to manufacturing was better. The EV maker appeared less affected by the chip crunch than other auto manufacturers. Tesla would grab whatever chips could find on the market and design components and software around them. This contrasts with waiting for a third-party supplier to change its entire production to replace a hard-to-get part.
Tesla applied the same principles to the batteries used in its vehicles. It still partnered with battery manufacturers to supply critical components. Giga Nevada, for instance, is operated in partnership with Panasonic, but Tesla hasn’t been shy in using battery cells provided by other partners, like CATL and BYD in China. Nevertheless, the latest gigafactories opened in Texas and Germany have their own battery manufacturing facilities.
Giga Berlin was supposed to make its own batteries for Model Y production. The battery shop in Gruenheide was expected to start production last year, with a planned capacity of 50 GWh per year. This is more than enough to cover Giga Berlin’s annual production. Nevertheless, the Inflation Reduction Act incentives in the U.S. changed everything. The U.S. government offers up to $45 per kWh, which cuts the costs of producing Li-Ion cells in half.
Suddenly, assembling batteries in Germany was not that attractive anymore. Even factoring in the shipping costs, bringing them from the U.S. is far more efficient. This convinced Tesla to put the brakes on its German battery facility. Nevertheless, work was not completely halted, as Brandenburg’s economy minister, Jörg Steinbach, confirmed on Wednesday. According to the German official, Tesla has officially put its battery factory into operation, albeit only for some individual battery components.
In an interview with the German news outlet rbb, Steinbach said that whatever Tesla produces at the factory makes the production building “buzzing.” Battery part production is also increasing, with an anode mixing line installed inside the building, as revealed by Tesmanian. Tesla still needs to start producing cathodes in Gruenheide and, at a later stage, churning out 4680 cells. That moment is still far in the future, though, with no estimates on a timeframe.
Time showed us that Tesla’s approach to manufacturing was better. The EV maker appeared less affected by the chip crunch than other auto manufacturers. Tesla would grab whatever chips could find on the market and design components and software around them. This contrasts with waiting for a third-party supplier to change its entire production to replace a hard-to-get part.
Tesla applied the same principles to the batteries used in its vehicles. It still partnered with battery manufacturers to supply critical components. Giga Nevada, for instance, is operated in partnership with Panasonic, but Tesla hasn’t been shy in using battery cells provided by other partners, like CATL and BYD in China. Nevertheless, the latest gigafactories opened in Texas and Germany have their own battery manufacturing facilities.
Giga Berlin was supposed to make its own batteries for Model Y production. The battery shop in Gruenheide was expected to start production last year, with a planned capacity of 50 GWh per year. This is more than enough to cover Giga Berlin’s annual production. Nevertheless, the Inflation Reduction Act incentives in the U.S. changed everything. The U.S. government offers up to $45 per kWh, which cuts the costs of producing Li-Ion cells in half.
Suddenly, assembling batteries in Germany was not that attractive anymore. Even factoring in the shipping costs, bringing them from the U.S. is far more efficient. This convinced Tesla to put the brakes on its German battery facility. Nevertheless, work was not completely halted, as Brandenburg’s economy minister, Jörg Steinbach, confirmed on Wednesday. According to the German official, Tesla has officially put its battery factory into operation, albeit only for some individual battery components.
In an interview with the German news outlet rbb, Steinbach said that whatever Tesla produces at the factory makes the production building “buzzing.” Battery part production is also increasing, with an anode mixing line installed inside the building, as revealed by Tesmanian. Tesla still needs to start producing cathodes in Gruenheide and, at a later stage, churning out 4680 cells. That moment is still far in the future, though, with no estimates on a timeframe.
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