How Giga Berlin could be the saviour for Tesla in China? Details here
Tesla has opened its Giga Berlin factory a few weeks ago after overcoming a lot of bottlenecks. The Giga Berlin comes as the second Giga factory of the EV company outside the US. The first one was launched in Shanghai. With the Giga Berlin plant rolling out Model Y for Europe and other markets, this factory is expected to play a crucial role in Tesla's survival in a cut-throat competitive market that is growing fast. But for that, the Berlin plant needs to ramp up quickly to help the automaker capture massive, but possibly fleeting demand from China, where the company is unable to keep up with orders, and at the same time, several other competitors are there.
China is currently one of the key markets for Tesla outside the US. The value of the Chinese market for the EV manufacturer has increased substantially since the opening of the Shanghai Gigafactory. Tesla's revenue in China has doubled for two consecutive years, hitting $13.8 billion in 2021. Apart from that, Giga Shanghai has also become the backbone of Tesla's manufacturing might for its global customers.
The pandemic induced lockdowns, global microchip crisis and labour shortages have resulted in Giga Shanghai being Tesla's key production site for Asia, Oceania and Europe as well. The China plant was tasked with manufacturing more than half of all Tesla EVs in 2021. But, as more than half of Tesla cars manufactured in China in the last two months were for export, the Chinese buyers are being forced into longer waiting periods. With China being a key market for the company and rising competition there, it is not a very rosy picture for Tesla.
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Creating more trouble for Tesla is the rise of both local and foreign players in the EV space, who are quickly gaining ground in the bulging Chinese market. Naturally, Tesla is risking losing a hefty number of customers due to its longer delivery period.
In such a scenario, the Berlin Guigafactory coming online could give the Shanghai plant much-needed breathing room to meet the growing demand for electric cars in China. The Giga Berlin has been approved for producing up to 500,000 EVs annually. Tesla is slated to open its fifth Gigafactory in the US in April. Altogether, with all these plants online, Tesla will be able to roll out around two million electric vehicles in 2022 and onwards, which will help the company to reduce its infamous waiting period.