Tesla's Berlin Factory Hits Brakes
Tesla's Gigafactory in Berlin is reportedly running at just 40% capacity, a drastic slowdown raising questions about European EV demand and potential supply chain issues. While the plant's head has disputed some production figures, the significant drop in output points to major headwinds for the company's European operations.
The production figures themselves are a point of contention. While reports citing data from Inovev claim the Grünheide plant produced just 149,040 Model Ys in 2025, plant manager Andre Thierig has publicly refuted this, stating the actual number was over 200,000. Both figures, however, remain significantly below the factory's stated annual capacity of more than 375,000 vehicles. The factory's output has been hampered by significant external disruptions. In early 2024, production was halted for two weeks due to component shortages caused by shipping delays from attacks in the Red Sea. The plant has also been a target of sabotage, including a suspected arson attack in March 2024 that crippled its power supply and stopped production for a week. Persistent local opposition creates another headwind. Environmental groups like "Disrupt Tesla" have organized large-scale protests, citing concerns over water consumption and deforestation related to a planned factory expansion. Activists have attempted to storm the plant, and residents in Grünheide voted against the expansion plans in a non-binding referendum. While the overall European battery-electric vehicle (BEV) market saw registrations surge in the first half of 2025, the growth rate is showing signs of slowing down. Germany remains the largest single market for BEVs in Europe, but increased competition and more cautious consumer spending are creating a more challenging environment. The Berlin-made Model Y faces a growing roster of European competitors. Rivals like the Hyundai Ioniq 5, Kia EV6, and Volkswagen ID.4 are gaining traction, while the Renault Scenic E-Tech and Peugeot E-3008 offer longer range. These alternatives often compete by offering faster charging speeds, different design aesthetics, or more conventional interiors. The slowdown isn't isolated to Berlin; it reflects a broader trend for the company. Tesla's global vehicle deliveries fell by 9.1% in 2025, marking the second consecutive annual decline. In early 2026, the company reduced its workforce at the German factory by approximately 1,700 as part of a global cost-cutting initiative.
