Published on November 22nd, 2019 | by Johnna Crider0
Why Tesla’s Plan To Build Gigafactory 4 In Germany Makes Sense
November 22nd, 2019 by Johnna Crider
By Johnna Crider and Zach Shahan
Tesla’s plan to build Gigafactory 4 (GF4) in Germany makes sense if you look at it from the perspective of Tesla’s mission.
Last week, after winning The Golden Steering wheel, Elon Musk made the announcement that Tesla would build its next gigafactory — #4 (even though one of those factories is a solar factory) — in Germany. Not only did the news come as a complete shock to some, but it seemed senseless to others who just don’t understand the mind of Elon Musk, or pretend to not understand it.
The German auto industry has been stagnant with its dependence on gasoline and diesel vehicles. As the world, and especially Europe, has demanded more efficient vehicles that pollute less, the German auto industry has had a hard time transitioning, which is part of the reason there was so much diesel cheating and criminal behavior. However, if one looks at the European auto industry as if it were a plant — an actual plant such as a rose bush — one can see that this market is still alive and breathing. Just because it seems to slow down or stagnate doesn’t mean it’s completely dead. No, it’s sending a message that it needs water. Tesla could very well be the water to bring this market back to life.
Tesla’s presence in Germany is a push to Germany’s large automakers — the country’s largest industry — that it is really, definitely, finally time to electrify. Volkswagen is apparently moving in that direction somewhat aggressively (or still not aggressively enough, depending on who you ask), but many see the transition as too slow. Some have even tried to write wake-up calls for the German auto industry, because of a concern about what will happen to German industry, jobs, and the economy if Germany’s “Big 3” are too slow to electrify. If you are a German and feel this way, Tesla’s decision to build a gigafactory in Germany is a great way to push the industry to try harder and clean up its act faster.
But this story isn’t about what Germans want. It’s about what Tesla wants.
What Is Musk’s Motive?
We have to factor in Tesla’s mission here. As you’ll recall, it’s to accelerate the world’s transition to sustainable energy as quickly as possible. Tesla cannot do that alone, so it must consider how it can most effectively stimulate change in others. Going to their homeland, going to the center of the industry, going to where the sauce is made is the best way to influence the industry.
Furthermore, Tesla does need to keep growing as quickly as possible itself and improving in the process. With the German auto industry’s established high reputation, there must be much to learn there. Tesla didn’t need to set up shop in one of the cities with German automakers were located, but being in the country allows Tesla to tap tremendous labor resources.
So, even as Tesla may be there to push the auto industry to work harder, it’s probably also there to take advantage of the embedded auto expertise of the country.
Why Building GF4 in Germany Makes Sense
I think Tesla building in Germany makes perfect sense. Germany is seen as the heart of the luxury automotive industry, and Tesla is trying to electrify this market as quickly as possible while continuing to go “downstream” and electrify all transport. If you want to solve a problem, go to the heart of the matter.
Lastly, Berlin is one of the most influential political capitals in Europe, and perhaps the world. It is deeply tied to democratic progress and remains the home of one of the strongest democratic centers in the world. Policy can also speed up the transition to EVs, so being near the big players can help to influence them to take bolder actions promoting electric vehicles, clean energy, and more.
Elon may not be very political, but he knows who wields power and is pragmatic about having positive, progressive associations with political leaders to get done what needs to get done.
Plus, it seems that Elon likes Berlin.
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