Tesla acquisition of German engineering firm should help with production ramp-up

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Tesla has announced plans to acquire Grohmann Engineering, a German company that the California carmaker called “one of the world leaders in highly automated methods of manufacturing.”

Grohmann currently has around 700 employees, and had revenues of 123 million euros ($136 million) in 2015. It has developed battery production lines for several automakers. The company will be renamed Tesla Grohmann Automation, and will serve as a base for Tesla Advanced Automation Germany headquarters. Tesla expects to add over 1,000 engineering and technical jobs in Germany over the next two years.

Reinventing the manufacturing process is an integral part of Tesla’s strategy to reach its goal of producing 500,000 cars per year by 2018. Most analysts agreed that the acquisition is a big step forward for the company. Forbes called the acquisition “a critical milestone in Tesla’s journey to scale up its operations,” and said that it will “address several production challenges and play a key role for the company to meet its production goals in the next few years.”

In Tesla’s own words:

Accelerating a sustainable energy future is only possible with high-volume factories. 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.

Under the continued leadership of [founder and CEO Klaus 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. 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.

 

Source: Tesla, Business Insider, Reuters, Forbes