- THE GERMAN AUTOMOTIVE MARKET IS UNDERGOING A PROFOUND TRANSFORMATION. ELECTRIC VEHICLES HAVE BECOME MORE AFFORDABLE BECAUSE THEY ARE HEAVILY SUBSIDIZED. GOVERNMENT INCENTIVES PLAY A MAJOR ROLE.
- TESLA’S NEW GIGAFACTORY IN BERLIN-BRANDENBURG WILL CREATE MANY EMPLOYMENT OPPORTUNITIES IN THE REGION. NEVERTHELESS, EMPLOYMENT CONTRACTS IN GERMANY DIFFER FROM THOSE IN THE UNITED STATES.
- THE OUTLOOK FOR TESLA IS GOOD BECAUSE TESLA CAN LEVERAGE ITS TECHNOLOGICAL ADVANTAGE IN GERMANY.
1. AT A CROSSROADS OF INDUSTRY IS ELECTROMOBILITY
Last year, Tesla’s new gigafactory in Berlin-Brandenburg began to take shape. Initially, the land was cleared from the forest that stood on the sandy marshes of Brandenburg. The area was earmarked for industrial development. Interest remained low for many years prior. This had to do with the spasmodic recovery of the East German economy after the fall of the Berlin Wall. But things have changed.
East Germany has always been a focus of electrical engineering and chemical engineering. These fruits of labor have now paid off, as East Germany is back, breathing new life into once-derelict industries. We find the discovery process was ardous, to help East Germany find its way, many industries were explored. The solar industry came first, but was overtaken by Chinese and East Asian competition. Eventually, the decision was made in East Germany to go into electric vehicle manufacturing. History was in the making, then Tesla came.
Tesla’s move: In the end, Berlin-Brandenburg stood as the final winner and decided the debate on where to build the new Gigafactory. Other locations could have been chosen instead of Berlin-Brandenburg, but the decision was made to pan for gold in the sandy marshlands of Brandenburg, so to speak.
What prompted Tesla to settle here? That’s hard to say, because it’s pure speculation. Part of the reason could be the tradition of excellence in eastern Germany and the long tradition of training and development that has produced outstanding engineers in eastern Germany. Another factor may have been the relatively lower labor costs in East Germany compared to West Germany and subsidies.
This may have been a price worth paying. Finally, the markets of Eastern Europe were close. This may have opened up prospects for exporting electric vehicles to Central and East Asia along the newly established Silk Road.
But labor laws in Germany are different. They differ significantly from those in the U.S.; the work culture may also be different.
While it may be tempting to attribute Tesla’s successful early market entry in Germany to mere initiative, this clearly does not apply to Tesla’s phenomenal spirit of innovation, which is virtually unrivaled.
Tesla’s market entry would clearly benefit Tesla, because this dynamic spirit is lacking in the German automotive and energy sectors.
So, from a cultural perspective, Tesla’s success depends on its ability to replicate the American entrepreneurial spirit here in Germany and offer a vision of the future that matches the German work ethic.
This is our perspective and we look forward to a fruitful exchange of information and to being corrected in our views. We provide information on the development of electromobility with a special focus on the East German EV sector.
2. FUEL BY ELECTRICITY THE CAR BATTERY, OR IS HYDROGEN THE FUEL TO BE?
Significant investments have flowed into other means of transportation to bridge the final chapter of the fossil fuel era. Electric vehicles are competing with other forms of energy such as hydrogen and biofuels for transportation. It is definitely worth looking at the advantages and disadvantages of these energy sources.
- Tesla still has a long way to go to achieve market dominance in Germany. Its main advantages are speed and agility. These strengths are important in Germany because most German companies have neither.
- Tesla is entering the German market at the right time. Germany is looking for new emerging business areas in which it can grow. Exports have traditionally been a key driver for the German economy. Therefore, it is of central importance for Germany to be a technological leader in as many areas as possible.