Tesla Plans to Boost Electric Vehicle Production at German Factory

Tesla is preparing to increase output at its electric vehicle manufacturing facility in Grünheide, near Berlin, as part of its ongoing strategy for growth in Europe. Despite ongoing challenges in the German electric vehicle market, the American automaker remains confident about its operational stability and future expansion plans at its only European production site.

The Grünheide plant, which began operations in 2022, currently employs around 11,000 people and produces approximately 5,000 vehicles each week, translating to an annual output of about 250,000 cars. The company has consistently increased production capacity each quarter over the past year, ensuring job security and avoiding the production stoppages or job cuts experienced by other industrial sites in Germany.

In 2025, Tesla continued to invest in the Grünheide facility, including the construction of a new building for prototype vehicles. Company representatives describe the current operational environment as stable, with regular evaluations to adjust production and market focus as needed. Recently, Canada was added as a new export market for the German-made vehicles, allowing Canadian buyers to benefit from more competitive pricing by bypassing the higher import tariffs imposed by the United States.

Globally, the automotive industry is facing profitability challenges. Although Germany's electric vehicle sector has shown signs of recovery, Tesla's market share in the country remains under pressure. Data from the Federal Motor Transport Authority indicates that between January and November 2025, 17,358 new Tesla vehicles were registered in Germany, marking a 48 percent decrease compared to the previous year. However, the Grünheide plant supplies vehicles to more than 30 markets, reducing its vulnerability to fluctuations in any single region.

Expansion continues to be a focus for Tesla in Germany. The automaker has already secured preliminary approval to increase production capacity at the plant and is preparing further applications as part of its long-term growth strategy. Any additional expansion will depend on decisions from the company's leadership in the United States. Infrastructure improvements are underway in the vicinity of the factory, including the relocation of the Fangschleuse train station and the construction of new roadways.

In mid-December, Tesla announced plans to establish the capacity for full-scale battery cell production in Germany. Beginning in 2027, the company aims to produce up to eight gigawatt-hours of battery cells annually at the Grünheide site, reinforcing its commitment to localizing critical components of the electric vehicle supply chain.

The German federal government continues to support the adoption of electric vehicles, particularly among households with low and middle incomes, through targeted incentives. Tesla views these measures as beneficial but emphasizes the importance of timely implementation for consumers to make informed decisions. Meanwhile, European Union policies may allow for continued sales of combustion engine vehicles beyond 2035, adding another dimension to the market outlook.

Environmental groups have expressed concerns about the factory's location, which partially overlaps with a water protection area. In response, Tesla highlights its initiatives to reduce water usage, including full recycling of production wastewater for over a year. This has resulted in a significant decrease in water consumption compared to previous years, addressing some of the environmental apprehensions surrounding the site.

Overall, Tesla's ongoing investments and expansion efforts at its German plant reflect the company's commitment to increasing production and localizing key manufacturing processes, while also navigating regulatory requirements and environmental considerations within the European market.