Tesla Reveals Plans for Cheap EV at Giga Berlin as Union Pressures Rise
Tesla’s stock (TSLA) finished slightly lower on Monday as the electric vehicle manufacturer announced that Giga Berlin, its factory in Germany, may produce its long-awaited affordable electric vehicle (EV). Additionally, Tesla workers in Germany are expected to receive a wage increase as union pressures mount.
CEO Elon Musk revealed the company’s plans to build a mainstream EV priced at 25,000 euros ($26,838) on its upcoming Gen 3 platform at Giga Berlin during his visit to the plant on Friday. This announcement comes after Musk’s attendance at an AI summit in the UK.
While production dates were not disclosed, sources indicate that Tesla is close to developing a fabrication technology that would enable the molding of nearly the entire underbody of the car in one piece, thereby reducing costs and enhancing production efficiency.
Musk has previously emphasized the importance of reducing costs to make EVs more affordable for consumers. He also highlighted the impact of high interest rates, which he believes hinder the company’s growth by making EVs unaffordable.
Investors have been eagerly awaiting more information about Tesla’s cheaper Gen 3 platform and the models it will introduce based on this platform since the company’s investor day event in March.
According to a biography on Elon Musk by Walter Isaacson, the creation of a cheap EV almost did not happen. Isaacson revealed that Musk initially prioritized building a cheap “robotaxi” that could operate autonomously without pedals or a steering wheel. However, key members of Musk’s team, including chief design officer Franz von Holzhausen, convinced him that offering an affordable global EV was essential to meet Tesla’s 50% compound annual growth rate. Eventually, Musk approved the production of both the cheap EV and the robotaxi on the same platform.
In a separate development, Tesla workers at Giga Berlin reportedly received a wage increase following persistent union pressure. Tesla executives disclosed a 4% wage hike during Musk’s visit to the factory. The IG Metall union in Germany has been attempting to organize Tesla’s workers and secure a union contract, unlike other major automakers in Europe. The United Auto Workers (UAW) in the US has also expressed interest in unionizing Tesla.
Tesla, however, denied any connection between the wage hikes and union organizing efforts, stating that the adjustments were not related to union activities. IG Metall regional director Dirk Schulze pointed out the significant wage gap between Tesla and other unionized automakers in Germany.
As the pressure for unionization continues, Tesla’s moves to produce a cheap EV and provide wage hikes indicate its willingness to address workers’ demands. The outcome of these developments will be closely watched by both investors and industry observers.
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Source: [Yahoo Finance]