In November, Tesla’s CEO Elon Musk was busy ingratiating himself with America’s future President Donald Trump. Meanwhile in Germany, Tesla’s sales imploded. Musk posts daily about immigration, a lack of babies, federal budgets, but rarely about his cars. Tesla’s factory could use some attention by the boss. In November, Tesla registrations in Germany were down 55.1% compared to November 2023, Germany’s regulator Kraftfahrt Bundesamt said. This was not an unusual spike: January through November 2024, Tesla sales in Germany were 43.6% below the same period in the prior year.
Meanwhile, Volkswagen Group captured 42.8 of Germany’s BEV market. Germany’s best-selling BEV is not a Tesla, but the Enyaq of Volkswagen’s budget-brand Skoda. Germany’s BEV market is firmly in the hands of “legacy” OEMs Volkswagen, BMW, and Daimler.
Tesla’s German factory in Grünheide near Berlin only runs at a capacity utilization of 51% – if we believe the published production data of 5,000 units per day. A report of Businessinsider said that the actual internal production targets are “significantly lower.”
In the auto business, a capacity utilization of less than 80% signals a loss-making factory. Other OEMs in Germany also suffer from overcapacity, and they are trying to change that. Volkswagen famously wants to close factories, a plan that is ferociously opposed by its powerful unions. Workers went on strike.
Curiously, Tesla plans to double the capacity of its already grossly underutilized Grünheide factory to a million units per year. Why is anybody’s guess. Ever since Germany canceled its generous EV subsidies, the German market for battery-electric vehicles has been well below its peak. Industry experts say that “Germany is losing more than five years in the ramp-up of electromobility.” The hot powertrain in Germany is hybrids, not BEVs. Sales of hybrids grew 20.3% in November.
Doubling your capacity to produce BEVs that are falling out of favor sounds suicidal.
