Tesla has big plans for the upcoming Model 3. It's set to begin initial limited production in July but co-founder and CEO Elon Musk has already set some ambitious goals for the new electric vehicle.
Tech Times reported in March that Tesla has already begun preparations to ramp up production of the Model 3 and now it seems it is doing so at the expense of one of its new acquisitions in Germany.
Tesla's Promise Expires
In November 2016, Tesla acquired Grohmann Engineering — one of the world's leaders in advanced automation for manufacturing, with high-profile clients like Daimler and BMW — in order to create the Tesla Advanced Automation Germany. This is in line with Tesla's goal of manufacturing 500,000 electric vehicles annually by 2018.
Musk assured at that time that despite the change in management, Tesla will honor Grohmann Engineering's existing contracts and will continue to serve outside clients.
"There are a number of existing automotive clients for Grohmann and we will, of course, honor those contracts and try to be as useful as we can to the industry as a whole in transitioning to clean energy mobility," Musk said in an interview following the acquisition.
However, now that the scheduled start of production for the Model 3 draws near, sources reveal that Tesla Grohmann Automation is withdrawing Musk's promise and will cancel all other contracts in favor of focusing on Model 3 production.
Tesla has already confirmed the news and added that the company is already in the process of canceling all existing orders, which is completely the opposite of what Musk had promised just months prior.
Tesla's German Arm
Grohmann's engineers and technicians have mixed feelings with regard to Tesla's decision. While some are excited at the prospect of working with an innovative car manufacturing company, some have expressed their concern about abandoning existing contracts with the big carmakers they have been working with.
Many of the workers prefer the security of having a broad range of clients and are worried about the long-term effects of the contract terminations. Hundreds of workers have unionized and are seeking a salary increase of €150 ($159) per month.
Tesla, however, seems to be growing amid these concerns and the company has even opened up several jobs in the Prüm, Germany site.
Perhaps Tesla's decision to go back on its word is a risk the company had to take in order to finally be able to meet its delivery goals. We will just have to wait and see how the contract cancellations will ultimately affect its business. At this time, it is difficult to predict whether the company made a good decision to only focus on its own vehicles.
