Image: Tesla
Tesla is doubling down on its European manufacturing ambitions. The company has announced a major new investment at Gigafactory Berlin that will allow it to produce up to 8 gigawatt-hours of battery cells per year starting in 2027, further tightening its vertical integration strategy.
In a statement to Reuters, Tesla said it is “creating the conditions to produce up to 8 gigawatt hours of battery cells a year” at its factory in Grünheide, near Berlin. To make that happen, the automaker is committing serious capital to local cell production. “To this end, we are investing another three-digit million amount in cell production,” Tesla said, adding that the move will bring total investments in the on-site cell factory to nearly €1 billion (about $1.2 billion).
At the core of the expansion are Tesla’s 4680 battery cells, which the company has increasingly positioned as a cornerstone of its long-term manufacturing plans. As of last year, Tesla had already produced more than 100 million 4680 cells for use across its products, highlighting how far the technology has progressed since its initial unveiling.
Tesla says the goal at Giga Berlin is full vertical integration. “The aim is to increase the vertical range of manufacture at the site: everything from battery cells to vehicles will be produced at a single location. This is unique in Europe and also strengthens the resilience of our supply chains,” the company said. Tesla went even further, noting, “If the conditions are right, the entire battery value chain will also take place in Gruenheide in the future.”
That ambition comes against a challenging backdrop. Tesla acknowledged that “in international competition with China and the USA, it is currently hardly possible to produce cells economically in Europe,” underscoring why this investment is particularly notable.
The announcement comes at a milestone moment for Gigafactory Berlin. The site, Tesla’s only Gigafactory in Europe, turned six years old last month and now employs around 11,500 people. As of March, the factory had produced more than 500,000 Model Y vehicles, hitting 100,000 refreshed Model Ys by August.
Tesla has been steadily ramping up activity at the site. Back in September, the company revealed plans to boost Model Y production at Giga Berlin, where completed vehicles now drive themselves off the production line. Looking ahead, Tesla is also set to open a new research and development center near the factory next year, further cementing Berlin as a critical hub for its European operations.
With battery cells, vehicles, and soon R&D all concentrated in one location, Tesla is clearly betting big on Giga Berlin as it looks to strengthen its position in an increasingly competitive European EV market.
