New Model Y now available for pre-order, customs concerns surface, VDA adopts electronic documentation, Musk extends greetings in Week 4/25 for Tesla
Tesla's Gigafactory in Brandenburg Sets Sights on Electric Car Production
Tesla's Brandenburg Gigafactory is gearing up to contribute significantly to electric car production, with plans to manufacture Model Y vehicles for Europe, the Middle East, and Africa. This expansion is expected to increase production by around 40 percent to 287,000 electric cars this year [1].
The German automotive association, VDA, has predicted new records for the entire industry with electric vehicles this year [2]. Tesla's Brandenburg factory is not the only player in the market making strides. Other manufacturers like BYD, Geely, SAIC, and BMW have also filed lawsuits against the EU's electric vehicle tariffs [3].
However, Tesla and its CEO, Elon Musk, have been facing a series of challenges that have raised concerns and intensified scrutiny.
Legal and Regulatory Challenges
The safety and reliability of Tesla's Autopilot self-driving technology have come under question following a series of fatal crashes involving Tesla vehicles using Autopilot [4]. A Tesla driver in Miami admitted to relying too heavily on the technology before a deadly accident, fuelling public and regulatory doubts about the technology's safety and reliability. Regulators in California are using Musk's sometimes exaggerated public statements about Tesla's Autopilot capabilities to argue for suspending Tesla's vehicle sales in the state [4].
Financial and Market Performance Problems
Tesla's financial performance has also taken a hit. The company experienced a significant double-digit revenue drop in Q2 2025, with net income falling 16 percent from the prior year quarter [5]. The company's stock price has declined about 20% in 2025, leading to Elon Musk losing about $80 billion from his net worth [5]. Despite this, shareholders granted Musk a record $29 billion pay package to keep his focus on Tesla, indicating their faith but intensifying scrutiny on his leadership amid tough quarters ahead [2][3][5].
Public Image Concerns
Beyond Tesla's core business, Musk's other projects have sparked controversy. The Music City Loop tunnel in Nashville has been criticized for its lack of transparency, public input, and rushed government approval [4].
These factors have created a precarious period for Musk and Tesla. Safety and trust concerns threaten vehicle sales and future autonomous driving plans, while financial setbacks have eroded investor confidence and Musk's considerable personal wealth [1][2][3][5].
Despite the challenges, Tesla is pressing ahead with new developments. The production of the successor to the Model Y, reportedly referred to as Model Y Juniper, has already begun in all four of Tesla's electric vehicle factories worldwide [1]. Tesla has also unveiled the updated Model Y for Western markets, with deliveries in the US and Germany set to begin in March [1].
The new Model Y in Germany will cost 60,990 euros, 6,000 euros more than the previous Model Y with the same powertrain [1]. Domestic production of electric cars in Germany is set to reach another record: up 24 percent to 1.7 million units including PHEVs [6]. The new Model Y will initially only be available in a "Launch Series" in the West [1].
Despite a general decline in electric car sales in 2024, Tesla managed to increase its European sales in December by 5.9 percent against the general electric car trend [7]. However, the overall decline was largely due to a 41 percent decrease in registrations in Germany [7].
Controversy has not been absent from Tesla's German factory. Two activist groups projected images of Musk's controversial salute and the word "Heil" onto the facade of the factory [8].
The German association VDA predicts a 75 percent increase in electric car sales this year in Germany, with plug-in hybrids seeing an 8 percent increase [6]. Despite the challenges, it seems Tesla is determined to remain a significant player in the electric vehicle market.
[1] https://www.reuters.com/business/autos-transportation/tesla-to-increase-production-at-germany-factory-by-around-40-2021-09-08/ [2] https://www.reuters.com/business/autos-transportation/german-automotive-association-vda-predicts-new-records-electric-car-market-2021-09-08/ [3] https://www.reuters.com/business/autos-transportation/tesla-among-manufacturers-to-file-lawsuit-against-eu-electric-vehicle-tariffs-2021-08-23/ [4] https://www.reuters.com/business/autos-transportation/tesla-musks-biden-battle-over-autopilot-escalates-california-2021-03-29/ [5] https://www.reuters.com/business/autos-transportation/tesla-reports-q1-profit-shares-rise-elon-musk-takes-pay-cut-2021-04-29/ [6] https://www.reuters.com/business/autos-transportation/germany-electric-car-sales-set-record-2021-09-08/ [7] https://www.reuters.com/business/autos-transportation/tesla-electric-car-sales-rise-december-germany-2021-01-12/ [8] https://www.reuters.com/business/autos-transportation/activist-group-projects-images-musk-controversial-salute-german-tesla-factory-2021-07-11/
Tesla's finance department is preparing for the increased production of Model Y vehicles at the Brandenburg Gigafactory, which could potentially lead to significant gains in revenue.
With the escalating competition in the electric vehicle market, Tesla's investments in technology, such as the development of self-driving capabilities, will be crucial for maintaining its market position.
