Elon Musk might not be known for his moves, but in this case, it’s perfectly acceptable for him to dance. The Tesla CEO showed off his moves as his company’s first German-made electric vehicles rolled off the production line, a key milestone in the company’s trajectory.
The Tesla plant was officially opened in the presence of German Chancellor Olaf Scholz, with Musk handing over fresh Model Y cars to customers. The new Tesla plant, aptly named ‘Giga Berlin’, is truly deserving of its name and needed roughly 20 different preliminary permits before it could be opened.
The construction was not without controversy as Germans voiced their concerns over environmental issues and the fact that the plant was built at lightning speed. The environmental activists expressed concern over various potential environmental effects the plant could cause and its expected water consumption.
Last year, the EV manufacturer was granted permission to conduct preliminary tests at its new factory in Grünheide but was only allowed to produce 2000 more car bodies, on top of the initial 250; however, the company was not permitted to sell them at the time.
This move to Germany makes Giga Berlin of fundamental strategic importance for the company. Combined with its factory in Austin, Texas, Musk hopes Tesla will become a real mass producer of electric cars within the course of the year. The EV manufacturer expects to produce around 1.3 million units globally by the close of 2023.
Amidst this great news, the controversial founder had more than just a new fleet of cars to celebrate, especially since Tesla stock climbed roughly 30% from last week. With investors renewing their interest in tech stock, certain names rose to the podium and stole huge wins.
Chipmaker Nvidia gained almost 25% in the last week, with similar performances for Apple, Microsoft and Amazon. The tech stocks rally isn’t a big surprise; it comes on the back of rising commodity markets due to inflation. Markets seem to be pricing in the interest-rate policy from the Federal Reserve, and bond yields are marching gain for gain.
Ordinarily, these factors should cause Tesla cause for concern, but none of this can get in the way of Elon Musk’s dance. Even though Tesla’s Model 3 is much loved all over Europe, Musk faces extremely tough competition from household names like Volkswagen Group. This will definitely be a closely watched race as the car manufacturers go head to head in the biggest markets, including China.
Tesla and its competitors still face supply chain hurdles that could easily play strongly on their profits. Metals needed to make batteries have become ridiculously expensive, owing to the supply chain issues and the Ukraine- Russia crisis.
Despite this, Tesla’s competitors, most notably; Volkswagen, BMW and Daimler (Mercedes), are going to have a tough time catching up to the company’s proprietary EV technology. Tesla’s competitors are currently working hard to produce EV cars of their own, but it’s yet to be seen if they will be able to stand the heat brought on by Tesla and its enigmatic CEO.