Volkswagen (VWAGY) Admits it is Reviewing EV Production Plans as Tesla’s (TSLA) Giga Berlin Raises Stakes

October 13, 2021 5:55 AM EDT

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Volkswagen AG (OTC: VWAGY) said it is reviewing plans for its biggest car plant in Wolfsburg, Germany, as Tesla (NASDAQ: TSLA) prepares to open its first car plant in Europe.

Michael Manske, a Volkswagen spokesperson, said the German car giant is addressing its production and EV plans.

"There is no question that we have to address the competitiveness of our plant in Wolfsburg in view of new market entrants," Manske said.

"Tesla is setting new standards for productivity and scale in Grunheide," he added.

The Giga Berlin factory has the capacity to produce up to 10,000 cars a week at full capacity, which is more than double the complete German battery-electric vehicle (EV) production in 2020.

Tesla reportedly requires only 10 hours to produce its Model 3 car, which is three times less than around 30 hours that Volkswagen needs to produce its ID.3 electric vehicle.

Volkswagen is based in Wolfsburg, where it employs 50,000 people. The factory currently doesn’t produce EVs, but it plans to start doing so in 2026.

Two days ago, Volkswagen said it will decide in the first half of the next year on the location of its next battery plant that will be located in eastern Europe. The German car company is focusing on Hungary, Poland, Slovakia, and the Czech Republic as potential destinations.

"As you know, what has to be taken into account for this decision are the country's respective conditions, the economic environment, the e-mobility strategy and the subsidy framework," a spokesperson for the company said.

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