Tesla acquires Germany-based Grohmann Engineering to speed up its manufacturing operations

Article by Christian A., on November 18, 2016

In a bid to acquire new production technologies and reduce per-vehicle manufacturing costs, Tesla has entered an agreement to purchase German firm Grohmann Engineering. Considered as one of the global leaders in highly automated manufacturing methods, Grohmann Engineering should allow Tesla to boost its manufacturing capability and know-how.

Tesla has acknowledged that only by having high-volume manufacturing sites will it be able to achieve a sustainable energy future. Such high-volume production facilities would enable Tesla to manufacture high-quality products with economies of scale, which means vehicles rolling off these sites would be more affordable and more accessible. In addition, Tesla considers such a high-volume factory as a product itself. Based in Prum, Germany, Grohmann Engineering would allow Tesla to get involved in high-volume highly automated manufacturing and make it possible for the California-based carmaker to realize its increased output target of 500,000 cars per year by 2018.

Tesla’s planned acquisition of Grohmann Engineering – led by founder and chief executive Klaus Grohmann -- includes the company’s development and production center in Germany, locations in Chandler, AZ, and Charlotte, NC, as well as a base in Shanghai, China. With the acquisition, Klaus Grohmann will also be brought into Tesla’s highly capable team of experts and leaders.

The acquisition of Grohmann Engineering will result to the creation of a new Tesla unit -- Tesla Advanced Automation Germany. The company itself will be renamed Tesla Grohmann Automation and will serve as the initial headquarters for Tesla Advanced Automation Germany. Tesla is also planning to create more locations for Tesla Advanced Automation Germany. According to Tesla, it plans to hire over 1,000 advanced engineering personnel and skilled technicians in Germany in the next two years.

Tesla Advanced Automation Germany – to be led by Klaus Grohmann – will be in charge of designing and producing several critical elements of Tesla’s automated manufacturing systems, thereby helping make the carmaker’s facilities become the most advanced in the world. Along with Tesla’s California and Michigan engineering facilities, Tesla Advanced Automation Germany should help the carmaker improve the speed and quality of production while cutting the capital cost per vehicle. Tesla noted that the production rate at its Fremont facility in California rose by 400 percent in four years, and the recent acquisition is expected to further accelerate the growth rate.

Tesla’s agreement to acquire Grohmann Engineering has yet to receive clearance from regulators both in the United States and Germany. The US carmaker expects regulators to give their full approval to the acquisition – resulting to the final closure of agreement – early next year.

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