Jun 09, 2020 (IAM Newswire via COMTEX) -- The biggest innovations in the auto industry, from Ford Motor Company /zigman2/quotes/208911460/composite F +0.11% to Toyota Motor Corporation to Tesla Inc /zigman2/quotes/203558040/composite TSLA +2.05% , have been about production. Now, Tesla is on its way to making a footprint in the world's largest markets: US, China and Europe. Last week, Bloomberg reported that the EV pioneer will impressively wrap up its next factory Gigafactory Berlin by mid-2021.
The German factory was supposed to be a challenge due to its legacy automakers. It was easy to be fast and efficient in China, as Tesla counted on a supportive government backing rapid industrial development. But it turns out even Germany wants Tesla. This is quite a threat for its traditional auto industry, which is currently struggling to deal with costs of COVID-19 and the shift to electrification, hopefully without destroying its legacy business in the process. While the VW Group /zigman2/quotes/204431732/delayed VWAGY -2.34% figures things out as it already announced a further cut R&D costs, Tesla is just increasing the pressure.
If the next Gigafactory in Berlin is indeed brought online by the middle of 2021, this means that in the span of less than three years, Tesla will have a manufacturing footprint in the world’s three most important auto markets. And let's not forget that a second US auto plant is under consideration and on that will build the company’s exotic Cybertruck. Therefore, the EV pioneer is building new factories at a pace that’s about twice as fast as other carmakers. For example, Volvo’s /zigman2/quotes/208069681/delayed VLVLY -0.89% plant in South Carolina took about two years to start moving vehicles off the lines.
If we put its manufacturing weaknesses aside, other fronts are beyond good. Tesla enjoys high customer loyalty, among the highest ones in the business. It has also marketing covered it is now the most valuable US automaker by stock-market value. It is worth more than Detroit's Big 3: General Motors /zigman2/quotes/205226835/composite GM -0.88% , Ford, and Fiat Chrysler Automobiles /zigman2/quotes/204248628/composite FCAU +0.25% combined. And it pulled it all off by spending essentially nothing on advertising.
Tesla had trouble with a heavily automated assembly line for its new Model 3. To solve the problem, the company created an improvised line. The temporary structure was made in the parking lot of its California plant. Many laughed when Musk spoke of his robot factory. It ended up being unrecognizable when compared to a traditional car plant wen it comes to speed, organization, and efficiency. Guess who ended up laughing when the tent showed Tesla can work fast. The tented assembly line worked brilliantly and immediately solved the problem. In 2019, Tesla managed to achieve a record as it delivered 250,000 cars. And yes, many of them were Model 3s. Problem solved!
The potential of Tesla's Berlin plant achievement is borderline revolutionary. It would entirely heal its Achilles’ heel incompetence. If Tesla can bring its German factory online in such a short timeframe, we can safely Tesla will revolutionize the auto industry. Moreover, each crisis gives birth to winners and losers. It’s becoming increasingly obvious that Tesla is likely to emerge from the coronavirus even more far ahead in the EV revolution than the traditional automakers. The only real question is how quickly will EV market recover and get back to its speed prior to COVID-19. And even if it stalls out, Tesla has a near monopoly at this point. Any further damage to the market only makes it more likely for the competition to take a step back even before the race starts.
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