Mobility Portal, Spain
Date: August 25, 2023
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By Mobility Portal
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Tesla would continue to “dominate” French market after establishing its production in Germany

Despite focusing its manufacturing in China, Tesla could still benefit from the ecological bonus for the entry of its electric vehicles into France. Which model would be manufactured in Germany? Below are the details.
Tesla gigafactory Berlín
Tesla could move the production of electric vehicles from China to Germany.

While the French Government indicated that public funds would not be allocated to subsidise foreign industries, Tesla could still continue benefiting from the ecological bonus.

The fact is that Elon Musk‘s automaker plans to shift electric vehicle production from China to Germany, maintaining its foothold in the French market.

If this move is executed, the company will manufacture all Model Y units in Europe.

It’s worth recalling that the French Government hinted at the possibility of establishing a factory in the country.

Meanwhile, Musk provided assurances on the matter, stating that “the investment will come, but not now.”

In this regard, he neither confirmed how nor when it would happen.

“I am very impressed with President Macron, the Government, and the open points on the industrial aspect,” Musk stated.

Emmanuel Macrón and Elon Musk.
Emmanuel Macrón and Elon Musk.

And he added, “That’s why I am convinced that in the future, Tesla will make the corresponding investments in France.

Even President Emmanuel Macron was seen shaking hands with the owner of the company.

Another of the leaders who expressed “good hopes” that Musk would invest in a future project in the country was the Minister of Economy, Bruno Le Maire.

“He (Musk) knows he would be welcomed in France,” Le Maire admitted.

It is worth noting that other candidate countries that appeared on the radar are Spain, Portugal, and Italy, although there are different versions.

Tesla Model Y: The Best-Selling in 2023

In France, this model was the top seller during 2023, with 17,741 registrations in the first half, out of a total of 138,077 registrations.

It even dethroned the Dacia Spring, which ranked second in the chart with 15,083 vehicles sold.

Following closely were the Fiat 500 with 12,395, the Peugeot 208 with 12,051, and the Renault Mégane with 9,488.

In the last month of the semester, both the Model Y and the Model 3 led the market.

With 4,335 for the former and 3,966 for the latter, they accounted for nearly 25% of the month’s sales, which reached a total of 33,280 units sold.

More Details on Tesla’s Production in Germany

The manufacturing of the Model Y at the Berlin plant would involve the rear-wheel-drive (RWD) variant of the model, thanks to the use of BYD batteries.

Tesla’s Model Y RWD from China uses a CATL LFP (Lithium Iron Phosphate) battery with a capacity of around 60 kWh.

Furthermore, the collaboration between Musk’s company and the Chinese battery manufacturer BYD aims to strengthen Tesla’s supply chain and reduce long delivery times.

BYD will provide its Blade batteries, of the LFP type, which will serve only for the basic RWD version of the Model Y.

It’s worth recalling that the plant located in Berlin, inaugurated in 2022, has the capacity to manufacture 500,000 vehicles per year.

Regarding battery production, it has a capacity of 50 GWh per year.

The need to adapt these batteries to one of the key manufacturing processes of the Model Y could explain why it has taken more than a year since the collaboration between BYD and Tesla was announced.

It’s important to consider that France is offering subsidies to battery manufacturers, among other strategies, to conquer the electromobility market.

Why Would the French Government Remove the Ecological Bonus?

From the government, they announced that starting in 2024, benefits would be removed from vehicles whose production involves a high carbon footprint.

This provision entails the exclusion of incentives for units that do not originate from Europe, with China being the most affected country.

It’s worth highlighting that authorities aim to replicate the United States’ Reduction Inflation Act (IRA) with protectionist measures that develop the national and regional green industry.

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