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Elon Musk’s answer to ramping up Tesla production: German engineering

Jim Tanner/Reuters
We’re going to need a better factory.
By Leslie Josephs
Published Last updated This article is more than 2 years old.

For years, automakers have turned to China, Mexico, and other countries where labor costs are low.

Tesla Motors is turning to Germany. The electric-car maker said Nov. 8 that it is acquiring Grohmann Engineering. The privately held firm, which would become Tesla Grohmann Automation at the deal’s completion, is known for its expertise in automated manufacturing. The Prüm, Germany-based company will be tasked with designing automated manufacturing methods for Tesla that the company expects to reduce production time and costs.

“As the machine that builds the machine, our factories are so important that we believe they will ultimately deserve an order of magnitude more attention in engineering than what they produce,” Tesla said. “At very high production volumes, the factory becomes more of a product than the product itself.”

Tesla has reported strong sales of its existing luxury sedans and is planning to grow with its less expensive Model 3.

The company said production at its Fremont, California factory rose 400% over the last four years and that it aims to produce 500,000 cars a year by 2018. With the Grohmann acquisition, which is subject to regulatory approval, Tesla said it would create 1,000 skilled technician and engineering jobs in Germany over the next two years. Grohmann would “serve as the initial base for Tesla Advanced Automation Germany headquarters, with other locations to follow,” Tesla said.