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Tesla wants to turn its Berlin factory into Europe’s biggest car plant

<i>Sean Gallup/Getty Images</i><br/>The Tesla factory in Grünheide
Sean Gallup/Getty Images
The Tesla factory in Grünheide

By Olesya Dmitracova and Chris Stern, CNN

London/Berlin (CNN) — Tesla has lodged an application to double the production capacity of its plant near Berlin to 1 million electric vehicles a year.

The world’s biggest maker of battery-powered electric cars also wants the plant — located about 30 kilometers (18 miles) southeast of the German capital — to manufacture more battery cells.

If the plans are approved, Tesla (TSLA)’s Gigafactory will be able to produce battery storage capacity of 100 gigawatt hours per year, up from 50 gigawatt hours at present, according to the application published by the country’s environmental authorities Wednesday.

CNN has contacted Tesla for comment.

The expansion means the Tesla factory, which delivered its first vehicle in March last year, would overtake Volkswagen (VLKAF)’s sprawling plant in the German city of Wolfsburg, stealing its crown as Europe’s biggest car factory.

The expansion may also set Europe’s largest carmaker further back in its competition with Tesla for a bigger slice of the global EV market. Volkswagen sold 572,000 electric cars last year, far behind Tesla’s 1.31 million deliveries. China’s BYD (BYDDF), backed by Warren Buffett, is ahead of them both if plug-in hybrids are included.

In December 2021, Volkswagen announced it would spend the equivalent of $100 billion over the following five years to electrify its lineup, allocating more than half of its total spending to EVs.

Volkswagen’s strategy in the United States, where Tesla is the biggest seller of EVs, also has a strong electrification component.

“In North America, Volkswagen Group aims to significantly expand its market share. This includes investments in new electric vehicles and a factory for battery cells in Canada,” the company said in a statement last month. It added that the “iconic” Scout brand would be relaunched with all-electric vehicles.

On Wednesday, Tesla reported a surprisingly large rise in profit in the second quarter, driven by an 83% jump in the number of vehicles sold. It forecast it would sell 1.8 million vehicles in total this year.

Anyone objecting to Tesla’s proposal to expand the German factory has until September 18 to do so. The construction of the plant was delayed as a result of objections, mostly on environmental grounds.

On Tuesday, the company held a question-and-answer session on its plan with local residents, according to Reuters.

The main concern at the meeting was how Tesla would build out the plant without using extra water. The carmaker has said it will achieve this by recycling the water it is already licensed to use, Reuters reported.

Tesla’s biggest factory outside the United States is in Shanghai. In 2022, more than half of the vehicles Tesla delivered were made in China.

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