Tesla targets 375,000 vehicles a year at German plant in 2026

Tesla plans to increase output at its Grünheide factory to as many as 375,000 vehicles a year in 2026 as European demand strengthens.

Tesla plans to boost production at its sole European factory in Grünheide, Germany, to as many as 375,000 vehicles a year in the 2026 financial year, as demand recovers and the plant expands into new markets.

"We expect a significant increase in production volume compared with the previous year," Tesla Manufacturing Brandenburg SE said in its 2025 annual report. The company said capacity utilization was also expected to rise and that the plant would supply more than 30 markets while expanding into additional ones.

The factory produced about 202,000 vehicles in 2025, down from roughly 211,000 a year earlier, as Tesla navigated a model changeover and introduced new variants. Revenue at the German unit fell to €7.1 billion from €7.7 billion, though net profit rose about €20 million to €77.1 million ($88.2 million). The plant currently produces the Model Y and employed about 11,000 people, including temporary workers, at the end of 2025.

Expansion Plans and Battery Production

The company plans to create 3,500 new jobs and aims to integrate the entire value chain from battery cells to finished vehicles at the site. Tesla earlier this year said it targeted weekly output of as many as 7,500 vehicles, or about 375,000 annually, while expanding battery cell production.

Tesla warned that the expansion remained subject to economic conditions and that escalating geopolitical tensions and potential supply chain disruptions could affect its outlook. Plans for full battery cell production at Grünheide depend on market conditions, the company said, citing challenges facing battery manufacturing in Europe compared with the US and China.

Investment Implications

The Grünheide expansion signals Tesla's commitment to its European manufacturing footprint at a time when EV demand in the region is showing signs of recovery. The factory's ability to reach 375,000 units annually would represent a roughly 86% increase from 2025 production levels, though execution risks remain given the company's warning on geopolitical headwinds and the higher cost environment for battery production in Europe versus China. Tesla's German unit operates in a competitive landscape where European automakers including Volkswagen and BMW are also ramping EV production, and where Chinese rival BYD continues to expand its presence in the region.

This article is for informational purposes only and does not constitute investment advice.