Tesla could “reach 10,000 cars a week towards the end of next year,” Musk says, before adding, “These aren’t promises. They’re guesstimates.”
For our magazine story on Tesla’s gargantuan new Berlin factory, Elon Musk spoke at length to Fortuneabout why Europe is so crucial to the company, and whether he’s worried about the tough rivalry with Germany’s cherished automakers, and the possible battles ahead with its powerful labor unions. Musk spoke for about 40 minutes by phone from his home, with, at moments, his baby crying and a dog barking in the background.
Why did you pick Berlin for your Gigafactory?
We needed a place with access to a large number of people, from very junior to very senior engineering. It’s called a Gigafactory for a reason! We’ll need probably on the order of between 40,000 and 50,000 people. In the first 18 months of production, it’s probably easily at least 20,000 people.
You say you’ll produce 500,000 cars a year. When are you going to hit that number?
We’d reach 10,000 cars a week towards the end of next year . I want to be clear: These aren’t promises. They’re guesstimates. I don’t have a crystal ball, but that’s a reasonable guess.
How much are you investing?
The total investment amount is going to be very, very substantial. And we’ll continue past the initial period for quite some time. It will include battery cell production. So, quite a vertically integrated factory. It’s like a combination of our Nevada Gigafactory and our Fremont [California] vehicle factory if they were put together. This is the first time that we’ll be making our own battery cells. It’s very exciting.
Of course you’ve had some stops along the way with all the environmental issues, right?
Yes, I think Germany may actually have more rigorous environmental rules and regulations than California, which I didn’t think was possible. I thought no place had more authorization than California!
Okay, so how surprised were you about the lizards and snakes [on Tesla’s site, which the company had to relocate under court order]?
Well, I was aware of the bats, but I was not aware of the snakes and lizards, which I found surprising because it can get very cold in the winter. I think this is not a fun place for a snake or a lizard. They will be very, very cold. Frozen!
Well, apparently they’re hiding deep underground right now. [Many reptiles are hibernating on the factory site, and will need to be relocated in the spring.]
People tell us they’re concerned you’re going to run into union issues.
It’s possible people who work at the Gigafactory will want to join IG Metall [German union representing autoworkers], but that would be only if we’re doing something wrong and I’m not properly seeing to their needs. I think we’d have to be doing something wrong at Tesla for them to feel they needed IG Metall. The way Germany works is there are so many protections for workers, even without a union, you have to have a workers’ council. I think it’s not obvious what IG Metall adds to that. It’s not occupying my thoughts, to be clear. What we’re worried about is making rapid progress on the battery, the building, getting the equipment installed, recruiting a really talented motivated team. This is definitely meant to be a pan-European factory, attracting talent from all over Europe.
Are you worried about the big German automakers? They could overtake you on their home turf.
We are taking a perspective not like we are foreigners intruding. We encouraged the other car companies to make electric cars, because the mission of Tesla is and always has been to accelerate sustainable energy. We’ve gone to great lengths to encourage them to accelerate electric vehicles. I think [Volkswagen CEO Herbert] Diess really means it about taking electric vehicles seriously. We’ve had a number of conversations over the years.
Why is Europe so important to Tesla?
For any car company of volume you have to succeed in three major markets: North America, China, and Europe. If you don’t, you simply cannot achieve economies of scale, and you end up basically unable to be competitive. You have to succeed in all three so you can divide your fixed costs, development of vehicles, substantial overheads. Unless you’re a very small niche car company.
When do you expect the first car to roll out of the Berlin Gigafactory?
Our goal is to start probably for the very first handful of cars in six to nine months [between July and October], and 1,000 cars a week before the end of the year. So very small production by the end of this year, ramping up to high production by the end of 2022, and getting to 500,000 a year by 2023.
And the battery production?
We have a pilot factory in Fremont, and, as we learn more, we are able to improve the volume of the battery factory so we need two or three months to finalize the design of the high-volume battery factory [in Berlin].
Will it be the biggest battery factory in the world?
It’ll be the biggest by far in Europe, and one of the biggest in the world. I have confidence that it will be the most advanced. It will be the most environmentally friendly. [It will be] dry electro batteries, which is a big improvement on the environmental front because you don’t have to evaporate and treat the emissions from the solvent. It’s a lot better from the emissions standpoint.
The European Union helps a lot with its big incentives for electrification.
Yes the EU has been very progressive on climate. They never left the Paris accord, haha! I’m so glad we [the U.S.] are back.
What will Giga Berlin look like?
We are going to make sure that it is beautiful, environmentally sustainable, really a model factory. We’re being very careful about our use of water; we will use as much renewable energy as possible. We’re getting a lot of wind power. Our factory will be a combination of wind power, and solar power on the roof, and recycling water as much as possible. I’m aiming to have it be a real gem. We’ll offer tourists to come and see it, and have it be a fun place.
So it’s going to be a destination place, not just a place that makes a lot of cars?
Absolutely. If you’re in the Berlin area this is one of the things you might have on your list to come see. It’ll be cool and fun. It’ll have the best battery technology in the world. It’ll be a fun trip.