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Tesla Motors Inc (TSLA) Gigafactory Concept Aped by European Foes

Tesla Model 3 (TSLA)

Tesla Motors Inc ‘s recent acquisition of Grohmann Engineering – a German manufacturing automation specialist – comes at a time when an increasing number of Gigafactory competitors are springing up across Europe, says a report from GTM.

Last month, the US firm announced the Grohmann deal after Swedish media said that its ex- supply chain vice president, Peter Carlsson, plans to open a battery gigafactory of his own in Sweden.

Tesla rivals planning own gigafactories

Around 5 EV and battery gigafactories are set to be constructed on the continent. It is going to be a crowded field by the time Tesla Motors Inc scales up. In the wake of the Grohmann acquisition, Tesla is also planning a European Gigafactory, which will be used to build cars and batteries.

In May, BMZ opened the first phase of a German battery manufacturing facility. LG Chem has also disclosed plans for a factory in Poland, which will possibly open next year. In addition, Samsung SDI wants to produce up to 2.5 gigawatt-hours of batteries from 2018 in Hungary.

SFG Energy –  Carlsson’s venture – has submitted a feasibility study for the factory to a Swedish government agency, which is in charge of state funding for R&D. The plant would manufacture up to 35 gigawatt-hours of batteries a year. Carlsson disclosed that the construction of SGF Energy factory could start in 2018, notes GTM.

It is not known if the company wants to use Sweden as a base because of the availability of cheap raw materials and hydropower. Sweden offers manganese, graphite, and nickel while Finland boasts cobalt, nickel and lithium reserves, notes GTM.

Arshad Saleem – energy storage and smart grids tech expert at InnoEnergy – said the trend toward gigafactories in Europe is about meeting the requirement for the electrification of transport.

Tesla Motors Inc (NASDAQ:TSLA)

Grohmann – a key part of Tesla’s competitive strategy

The battery manufacturing capacity growth anticipated for Europe means Tesla Motors Inc will be operating in a very competitive market by the time its European factory opens.

In a blog post last month, the US firm said that Grohmann Engineering, which is led by CEO and founder Klaus Grohmann, is one of the world leaders in highly automated methods of manufacturing. The automaker said that “it will serve as the main base for Tesla Advanced Automation Germany headquarters, with other locations to follow.” Tesla anticipates to add around 1,000 skilled technician and advanced engineering jobs in Germany over the next two years.

Brett Simon, the energy storage analyst with GTM Research, said the electric carmaker is increasingly bringing expertise in-house, and thus, the acquisition was highly significant. Simon says the purchase shows how serious the US firm is about hiking production and moving to become more vertically integrated.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.