The Zhitong Finance App learned that the 2025 financial report released by Tesla (TSLA.US)'s German manufacturing subsidiary confirmed that the American electric vehicle giant plans to increase the weekly output of the Greenhead plant to 7,500 units in the 2026 fiscal year, equivalent to an annual output of about 375,000 vehicles, an increase of about 20%, while also expanding the battery business and adding 3,500 jobs. This expansion plan is in stark contrast to the ongoing wave of layoffs in the German automobile industry. Traditional car giants such as Volkswagen, Mercedes-Benz, and BMW shut down their factories one after another to lay off their employees.
From 54% to full production: capacity utilization needs to be improved
The Greenhead plant is Tesla's only vehicle production base in Europe. It was put into operation in March 2022, and currently only Model Y models are produced. In 2025, the plant produced a total of 202,000 vehicles, a year-on-year decrease of about 9,000 vehicles, and the capacity utilization rate fell from 56% to 54%. Tesla attributed the decline in production to the effects of model adjustments and the integration of the new facelift.
Despite declining production, Tesla's German subsidiary achieved net profit of 77.1 million euros (about US$88.2 million) in 2025, an increase of about 20 million euros compared to 56.8 million euros in 2024. However, revenue fell to 7.1 billion euros from 7.7 billion euros in 2024. This phenomenon of “reducing volume and increasing profit” shows that even when the capacity utilization rate is less than 60%, Tesla can still extract more profit from every car.
The 2026 production expansion plan is a direct response to this situation. The company expects production to be “significantly higher” than the previous year in 2026, and capacity utilization will increase simultaneously. Judging from the target of 7,500 vehicles per week and 375,000 vehicles per year, Tesla is trying to push Greenhead's capacity utilization rate from 54% to a level close to full production.
3,500 new jobs: bucking the trend and recruiting people amid Germany's layoffs
Plans to expand production are accompanied by large-scale recruitment actions. Tesla plans to create around 3,500 new jobs in the short to medium term at the Greenhead plant. The specific composition includes: the vehicle production department added about 1,000 people, the battery production department added about 1,500 people, and the conversion of about 500 temporary workers to regular employees.
Currently, the total number of employees at the Gleenheide plant is approximately 12,500 people. In June of this year, Tesla announced that it would increase weekly production by 20% to 7,500 vehicles starting in October, and to recruit an additional 1,000 new employees for this purpose. Of the first batch of 1,000 recruitments announced earlier, about 700 people have already joined the job.
This recruitment scale can be called “different” in the current German automobile industry. According to an analysis by personnel service provider Index, the number of job vacancies in the German automotive industry continued to be low in the first half of 2026, far below the peak in the first half of 2023. The CEO of the Volkswagen Group threatened to lay off 50,000 more employees worldwide; the CEO of Mercedes-Benz demanded that the 35-hour work week be abandoned; the new BMW CEO announced an austerity plan when he took office; and Opel cut 650 R&D jobs. There are only 101 jobs posted on Audi's public recruitment website, of which only 5 are official jobs.
Why is Tesla bucking the trend and expanding? According to local media reports, Tesla operates a 38-hour work week in Gruenheide, which is 3 hours longer than other car factories in Germany. This alone brings a 7.9% cost advantage. Furthermore, Tesla is the only manufacturer that has not signed a collective labor agreement with IG Metall, Germany's largest trade union. Gruenheid's location near the Polish border also enabled Tesla to obtain Polish workers with 58% lower labor costs.
Battery ambition: 18GWh production capacity and a “European first” complete industrial chain
In addition to the expansion of vehicle production, battery production is another main line of this expansion. Tesla plans to increase the annual battery production capacity of the Greenhead plant from the initial plan of 8 GWh to 18 GWh, and invest an additional 250 million US dollars to this end. The 18GWh production capacity is sufficient to meet the battery needs of approximately 250,000 to 350,000 vehicles. Battery production is expected to begin in the first half of 2027, which will create around 1,500 new jobs.
Tesla's goal is to integrate the complete industrial chain from battery cells to the end of the line in Greenheide — this model is said to be “the first of its kind in Europe”. However, the company also admits in its annual report that European battery production “faces huge challenges” and has always been closely linked to economic framework conditions such as supply chains. Compared to the Chinese and US markets, the European battery manufacturing industry faces multiple development barriers.
Demand recovers: Model Y returns to the top of the German electric car sales list
The motivation to expand production comes from real market demand. After experiencing weakness in 2025, Tesla is recovering strongly in the European market. In March 2026, the number of Model Y registrations in Germany quadrupled year-on-year to 9,252 vehicles. In the same month, Tesla's new car registrations in the German market increased by more than 315% year over year. This trend continued into the second quarter: Tesla delivered 481,000 vehicles globally in the second quarter of 2026, an increase of 25% over the previous year, far exceeding market expectations.
The June data is equally impressive. Tesla's new car registrations in France doubled year over year (up 105%), Sweden increased 56%, and Denmark increased 39%. In the first half of this year, Tesla registered nearly 29,000 vehicles in Germany with the Model Y and Model 3 models alone, an increase of 225% over the previous year. The Model Y has returned to the top of the list of best-selling electric cars in Germany.
However, the recovery was uneven. According to July UK market data, Tesla's new car sales fell nearly 60% year on year to 987 units. In early July, it was reported that BMW once surpassed Tesla by delivering 308 electric vehicles per month in Europe. The competitive landscape in the European market is still changing dynamically.
Strategic significance: the multiple value of localized production
From a strategic perspective, the expansion of the Berlin plant is critical to Tesla. The Greenhead plant currently supplies more than 30 markets and will expand further in the future. Local production in Europe helps Tesla reduce its dependence on exports from China and the US, and protects European deliveries from logistics restrictions and potential trade frictions. At the same time, localized production has also helped Tesla maintain price competitiveness — with good cost control, Tesla has drastically reduced the starting price in Germany.
Tesla also clearly indicated the risks in its annual report. The company said that the implementation of the expansion plan is still constrained by the macroeconomic environment. Increased geographical conflicts and the risk of supply chain disruptions may affect business expectations. The “huge challenge” of European battery manufacturing and the pressure of international competition are also variables that cannot be ignored.
Furthermore, Musk said earlier this year that he hoped the Berlin factory would also produce Cybercab autonomous taxis and Optimus humanoid robots in the future. This means that the long-term position of the Greenheide plant may go beyond a simple automobile manufacturing base.