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Tesla acquires a German automation company to accelerate vehicle production

Tesla acquires a German automation company to accelerate vehicle production

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Tesla has agreed to acquire Grohmann Engineering, a German firm that specializes in automated manufacturing. Founder Klaus Grohmann will also be joining Tesla and will head a new division within the automaker called Tesla Advanced Automation Germany.

Tesla plans to add an additional 1,000 engineering and technician jobs in Germany, on top of Grohmann’s existing 700 employees, over the next two years as the company looks to aggressively ramp up electrical vehicle production at its Fremont, California factory. Tesla has said it wants to increase production from around 80,000 cars in 2016 to 500,000 cars in 2018. Its more affordable Model 3 EV is expected to begin production late this year.

This is the first “significant” acquisition in Tesla’s history, said Tesla CEO Elon Musk.

“Because automation is such a vital part of the future of Tesla, the phrase I’ve used before is that it’s about building the machine that’s building the machine,” said Musk on a call with journalists this morning. “That actually becomes more important than the machine itself as the volume increases. We think it’s important to bring in world-class engineering talent and our first choice was Grohmann.”

“It’s about building the machine that’s building the machine.”

Tesla and Grohmann have been working together for more than a year and the acquisition came out of a mutual desire for the firms to work together even more closely. Grohmann works with a number of other automotive manufacturers, as well as semiconductor and life-science companies, and the company will continue to work with outside clients, including those in the automotive industry.

“Companies are people, and we’re very honored that [founder Klaus Grohmann] will be staying on,” said Musk. “That makes a big difference.”

Tesla CTO JB Straubel said the pool of engineering talent in Germany is significant and that drove the decision to invest in Germany and expand the Grohmann team post-acquisition.

A number of elements of Tesla’s automated manufacturing systems will be designed in-house by the Advanced Automation team in Prüm, Germany, and the company believes it will deliver “exponential improvements in the speed and quality of production” as it works to increase vehicle production ahead of the Model 3 launch.

Tesla has increased its vehicle production by 400 percent over the past four years, but it will need to increase production four-fold over the next two years if it expects to hit its production goals. Musk said his company is also in the early stages of planning a combined battery and vehicle factory — a “Gigafactory 2” — to be located in Europe.

Acquisition price was not disclosed, but the deal is expected to close by early 2017.