Tesla Motors has agreed to acquire German engineering firm Grohmann Engineering, in a move that should help the electric car maker ramp up production of its vehicles. Grohmann makes automated manufacturing systems for a variety of industries, and Tesla says it will use the company's expertise to build a more efficient factory for the mass production of its cars and batteries. The purchase price was not disclosed.
Here's what the acquisition could mean for Tesla:
- More efficient production: Grohmann specializes in automated manufacturing systems, which could help Tesla streamline its production process and increase efficiency. That's critical as the company ramps up production of its mass-market Model 3 sedan, which is already facing production delays.
- A factory in Germany: Tesla plans to build a factory in Grohmann's hometown of Pruem, Germany, which will eventually produce batteries, cars and charging stations. The factory will initially focus on producing batteries and charging stations, with car production starting later.
- More jobs in Germany: The factory is expected to create up to 1,000 jobs, most of them in engineering and skilled manufacturing. That would be a welcome boost for the German economy, which has been struggling with high unemployment.
- A boost for Tesla's stock: The news sent Tesla's stock soaring in pre-market trading on Tuesday. Tesla has been under pressure to deliver on its production goals, and the Grohmann acquisition could be seen as a positive step in that direction.
The acquisition is the latest in a string of Tesla moves to expand its manufacturing capabilities. The company is already building a giant factory in Nevada to produce batteries, and it plans to build another factory in China to produce cars. With the Grohmann acquisition, Tesla is laying the foundation for a global manufacturing network that will help it meet the demand for its products.