Tesla will produce batteries in Berlin, but one ingredient is missing

Tesla Giga Berlin will have a battery cell production facility, and the question just comes down to when. Appropriately enough, when the company finds the help it needs to get the cell production portion of the facility underway, Tesla will start manufacturing batteries. The real shortcoming is the fact that the required talent isn’t available, and high rates of employee turnover could lead to delays in the company’s plans to produce cells in Germany.

Jefferies analyst Philippe Houchois asked Tesla CEO Elon Musk and Senior VP of Powertrain and Energy Engineering Drew Baglino what issues Tesla may encounter on its journey toward full-scale cell production at the future German plant.

“Will there be the battery capacity consistence with the amount of assembly volume you expect to come out of the — And if not, would you be able to source your battery requirements out of Europe? Or would you have to import batteries from outside Europe to ensure production in Berlin,” Houchois asked the two Tesla execs during the Q2 2020 Earnings Call.

Musk confirmed that Giga Berlin would have cell manufacturing that would handle the production load that comes out of the facility, but Drew Baglino gave more detail on what the delays could be. Hint: It has to do with a lack of available talent.

Baglino mostly added onto Musk’s comment, confirming that a cell production facility would be in Berlin eventually. Still, it depends on when the company can put together a sufficient battery manufacturing team at the new Gigafactory.

“Like the same goes in all areas of cell, supply chain, manufacturing materials, design, we are solving this problem, and we’re treating it like any other problem that we have solved. We will solve this problem, talented people to join us as we solve this problem,” Baglino said.

Once the workers get there, they need to stay. They can’t be in “the garden,” as Musk calls it.

“My biggest concern for getting our talented people is just probably Berlin because the labor mobility in Europe is not as low. I would recommend changing this. Like somebody wants to leave and join another company,” Musk said. “Sometimes they have to spend six months on garden leave. It’s called garden, hanging out in the garden basically, and like this is not a good use of people’s time. I mean, if they want us to hang out on the garden, that’s fine, but they shouldn’t have to.”

Interestingly enough, workers leaving Tesla to join other companies is a relevant issue. Tesla has filed multiple lawsuits, most recently against fellow electric carmaker Rivian, that accused the company of poaching employees. Tesla also has an open case with China-based Xpeng.

But either way, Tesla needs the workforce, and manufacturing jobs for Giga Berlin are of high availability, according to the company’s Career page.

Earlier in the call, Musk and Baglino both talked about the need for manufacturing workers who would be willing to help the company improve production lines.

For a long time, Musk has stated that Tesla is looking for brilliant minds to help revolutionize the way the company manufactures vehicles. The CEO has said that too many smart people end up going into medicine or law, and improvements to manufacturing are needed as well.

Battery cell shortages were inhibiting Tesla from starting projects in other locations. One of those projects was the Tesla Semi, which Elon Musk indicated would begin a “volume production” push later this year.

The issue with producing the Semi beforehand was a shortage of battery cells. But now that the company has openly committed to building the commercial truck at Giga Texas, there is an indication that battery shortages are not an issue any longer.

The cells are there, but the workers are not. Tesla will eventually build these cells in Germany. Still, there needs to be an accommodating team to handle the workload, especially considering half a million vehicles a year will be rolling off the production lines starting in July 2021.

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