Tesla’s quotes are growing because of the start of production in Germany

This week, a new production of Tesla Inc. (TSLA) begins work in Berlin in Germany. The new plant will optimize the cost of electric vehicles produced and increase their competitiveness against the background of local car brands. According to Tesla’s plans, the new German plant can increase production volumes to 500,000 electric vehicles per year.

However, at the first stage, by the end of this year, it to reach production volumes of 5,000 to 10,000 cars per week. Initially, the plant will operate at about 50% capacity. Organizing the production of electric vehicles in Europe will help Tesla avoid the costs of delivering cars to the region from factories in the United States and China, as well as import tariffs. These two factors are supposed to reduce the price of electric cars and make them even more competitive in Europe.

Tesla also notes that localization of production in Germany will allow the company’s specialists’ electric vehicles to the tastes and needs of the local audience. We should note that there is already a high demand for electric vehicles in Europe and rising gasoline prices and more competitive prices for electric vehicles will help further stimulate this interest.

Last year, the share of sales of electric vehicles and plug-in hybrids in Europe almost doubled and now accounts for 18% of total car sales. Note that in early March 2022, Tesla raised the prices of its Model Y and Model 3 cars by $1,000, and also increased the prices of some Chinese-made Model 3 and Model Y cars. This is not the first price increase in recent quarters.

For example, the price in the USA for the Model Y Long Range jumped by 20% compared to January 2021, the price for the Model 3 Long Range increased by 10.6% over the same period. This decision resulted from an increase in the price of raw materials such as nickel, lithium, and other materials.