Tesla to acquire German company to speed up electric car production

The latest Tesla cars are on display at the flagship Tesla showroom in Beijing on August 16. In a bid to ramp up production, Tesla announced plans Tuesday to acquire German-based Grohmann Engineering. File photo by Stephen Shaver/UPI

PALO ALTO, Calif., Nov. 9 (UPI) — Tesla announced plans on Tuesday to acquire German based-Grohmann Engineering, a company that specializes in automated manufacturing, in a bid to accelerate production of its high-end electric vehicles.

No terms for the deal were announced.

Grohmann Engineering is a privately held corporation headquartered in the town of Prüm, in western Germany.

Founder Klaus Grohmann will head a new division at Tesla called Tesla Advanced Automation Germany.

Tesla, with headquarters in Palo Alto, Calif., plans to add more than 1,000 advanced engineering and skilled technician jobs in Germany over the next two years.

“Under the continued leadership of Mr. Grohmann, several critical elements of Tesla’s automated manufacturing systems will be designed and produced in Prüm to help make our factories the most advanced in the world,” Tesla said in a release. “Combined with our California and Michigan engineering facilities, as well as other locations to follow, we believe the result will yield exponential improvements in the speed and quality of production, while substantially reducing the capital expenditures required per vehicle.”

Tesla says in the last four years, it has increased production at its factory in Fremont, Calif., by 400 percent and said the company expects the acquisition of Grohmann to “accelerate” that growth rate.

Tesla, which is setting an output target of 500,000 cars by 2018, wants to capitalize on Grohmann’s automation strength. Tesla plans to produce 80,000 to 90,000 carsthis year after selling 50,580 in 2015.

“Accelerating a sustainable energy future is only possible with high-volume factories,” the company said. “They allow us to manufacture high-quality products with economies of scale, making them more affordable and accessible to the world. As the machine that builds the machine, our factories are so important that we believe they will ultimately deserve an order of magnitude more attention in engineering than what they produce. At very high production volumes, the factory becomes more of a product than the product itself.”

Pending approval from regulators, Tesla plans to complete the acquisition early next year.

In August, Tesla announced it reached a deal to buy SolarCity Corp. for $2.6 billion, combining Elon Musk’s electric-car and solar-energy companies. SolarCity sells solar energy systems to homeowners, businesses and government organizations.


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