So much for German efficiency.
The inability to increase production to meet demand following price cuts is the latest problem to strike Tesla's sprawling new Berlin-area Gigafactory. Previously, the facility faced a severe labor shortage and an inadequate water supply to support an expansion.
According to Reuters, German Model Y buyers who've recently placed orders for the basic version will receive their vehicles in February or March instead of the January to March delivery date they were given initially. This follows the EV automaker's decision to slash prices by 17% last week. Those who ordered a Model Y Long Range or Performance variant are still scheduled to take delivery in January to March, likely because their price cuts were far lower at 4% and 1%, respectively.
The production bottleneck has already gotten the attention of at least one German politician. Brandenburg's Economy Minister Joerg Steinbach said that production output “has to grow up a bit more.”
The main problem is a lack of factory employees. As reported last month, Tesla only managed to hire roughly 7,000 employees to build the Model 3 and Model Y at this facility. Tesla's initial goal was to have 12,000 workers. This shortage has already resulted in the facility failing to meet its 500,000-unit goal last year. So why has it been so hard to hire, especially as the world is facing an economic slowdown?
Because Germany's manufacturing sector is very competitive. Legacy automakers, such as Volkswagen, pay more. Tesla reportedly pays its German workers 20% less than the competition. Inexperienced management has contributed to the problem as well.
Tesla is now supposedly recruiting 200 to 300 people a week for the Berlin factory, a move that has helped increase the facility's labor force to around 9,000.
Local labor officials further claim that workers complain about long working hours and sometimes weekend shifts. Germany's labor force is not accustomed to this, a reality that has Tesla attempting to recruit from neighboring Poland. Language barriers have made that task difficult. The German Gigafactory is not the only Tesla plant struggling with output.
The Texas facility, also charged with Model Y production, has faced its own production issues. Tesla brought in the head of its Shanghai factory, Tom Zhu, who successfully led that facility through pandemic lockdowns, to evaluate the situation and come up with solutions.
His services might now be needed in Germany as well.
Source Credits: Reuters
Keyword: Tesla's German Gigafactory Can't Build Enough Model Ys To Meet Demand