Tesla Acquires German Firm To Help Boost Production
The time has come for Tesla to beef up its production capacityby Kirby Garlitos, on
Tesla has taken a big step towards beefing up its production capabilities with the acquisition of Grohmann Engineering, a production services company that specializes in assembly systems, in-line assembly, and automated manufacturing. Details behind the purchase price were not disclosed, but the deal is largely seen as a pre-emptive move from Tesla in preparation for the company’s goal of increasing production of its vehicles.
Part of the transaction also puts Grohmann Engineering in the thick of Tesla’s production as the German company will be tasked to help Tesla develop automated manufacturing systems that the electric car maker will eventually use in its production facilities.
Considering that Tesla has set a production output of 500,000 units per year by 2018, it’s important for the automaker to have facilities that can handle that kind of load, especially when its facility in Freemont, California is well over capacity, having already increased its production rate by as much as 400 percent in just four years.
Not only does this acquisition have the potential to streamline the production process in Tesla’s Freemont facility, it could also help do the same in Tesla’s assembly plant in the Netherlands and all other future production facilities, including one in France that’s rumored to be in the pipeline.
The acquisition is expected to be finalized and approved by German regulators by the early part of 2017. Once the deal is signed, sealed, and delivered, the company will officially change its name from Grohmann Engineering to Tesla Grohmann Automation.
Continue after the jump to read the full story.
Tesla’s laying the groundwork to increase its production capabilities
As often as Tesla has been in the headlines recently, there haven’t been that many developments on its issue of increasing production for its vehicle lineup. So consider this great news for the company because this is a huge step in not only streamlining the production process of its models, but just as important, it’s an indication that Tesla is putting in the work to make sure that it has a more efficient production process in time for the arrival of the Tesla Model 3.
Remember, Tesla has drawn skepticism about its goal of producing 500,000 units per year by 2018. Some have called it unrealistic while others have questioned whether the company was biting off more than it could chew. To be fair, those criticisms come with their own merits because Tesla has yet to handle the kind of load that the Tesla Model 3 will demand when production starts in the middle part of 2017.
So, consider the acquisition of Grohmann Engineering as Tesla’s way of addressing those concerns. At the very least, this purchase should help Tesla increase its production capabilities to match the strong demand for the Model 3, and not only that, but Tesla’s also planning to build a compact crossover, a minibus, and even a pickup truck in the future. The company needs to have a place and a process in place to accommodate those models too, right?
Read our full review on the 2018 Tesla Model 3 here.