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Tesla gets approval for vehicle production in Germany


The future Tesla factory near Berlin.


Photo:

HANNIBAL HANSCHKE/REUTERS

BERLIN—Tesla Inc.

TSLA -0.47%

won local approvals in Germany to officially begin production of electric vehicles at its new factory outside Berlin, a key pillar of Chief Executive Elon Musk’s drive to rapidly ramp up production and sales.

Tesla’s factory is a jab at the front of established European automakers, which have invested billions of euros in recent years to develop electric cars and catch up with the US powerhouse.

Berlin, when fully operational, will have a production capacity of 500,000 vehicles and will initially manufacture Model Y compact crossover vehicles. Tesla produced a total of just under a million vehicles last year in the world. The plant is Tesla’s third, after Fremont, California, and Shanghai. Tesla plans to start production at a new plant in Austin, Texas soon.

Tesla’s factory in Germany will play a key role in helping the company grow its market share in Europe by allowing it to customize models with specific variations for European customers. Local production should also help Tesla cut costs, reducing the need for expensive shipping and eliminating import duties.

Tesla CEO Elon Musk turned his first European Gigafactory near Berlin into a fairground where visitors could tour the facility. Photo: Patrick Pleul/Associated Press (Video 11/10/21)

Write to William Boston at [email protected]

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