The site of the Tesla Gigafactory for electric cars in Gruenheide near Berlin as seen on April 27. — AP
FRANKFURT: Tesla Inc.’s factory outside Berlin won’t start production before the end of January next year due to delays affecting battery pack output, German trade magazine Automobilwoche reported, citing unidentified sources close to the company.
Chief executive officer Elon Musk gave the team in charge of the plant six more months to complete the project, according to the report published Sunday. Tesla wasn’t immediately available for comment.
Setting up a local manufacturing base in Europe and constructing a new factory in Texas were among Tesla’s top initiatives for this year. Without cars coming out of Germany, the company will be constrained in the midst of explosive growth in electric-vehicle sales for incumbents led by Volkswagen AG.
"Of the new launches, we believe Berlin is highest priority,” Dan Levy, a Credit Suisse analyst who rates Tesla the equivalent of a hold, wrote in an April 27 report.
He called Europe "ground zero for global EV inflection” and expects the factory to enable the company to cut prices in the region.
Musk said last week that Tesla appeared to be a year to 18 months away from volume production of next-generation battery cells the company is attempting to make in-house. While Tesla has been building the batteries in California, the CEO has warned about the difficulty of getting them to market.
"Scaling up the production process is much harder than proving something out on a lab bench,” Musk said during a European battery conference in November.
The thicker and more voluminous 4680 cells — named after their 46mm diameter and 80mm height — are still largely unproven. They could be harder to produce and prone to overheating, according to Yasuaki Takamoto, the EV battery chief at Panasonic Corp., which is working on the cells alongside its long-time partner.
In addition to internal battery issues, Tesla is facing administrative delays.
The company notified local authorities last week that it would make changes to an application that must be approved before it can start production.
While projects at the site including the paint shop and body stamping lines are at an advanced stage, environmental groups have raised objections about water use and threats to local wildlife, delaying the project’s approval process.
When reporting earnings on April 26, Tesla said vehicle production at its German factory was on track for starting production in late 2021. A few weeks earlier, it said the plant would be ready in July.