Tesla Could Choose British Midlands For Next Factory
Recently, Elon Musk told Leonardo DiCaprio that the world will need about 100 Gigafactories in order to transition to 100% renewable energy. Musk is also looking down the road and thinking if Tesla will need more factories to produce its cars once the Fremont facility is at full capacity. There are a number of reasons why the British Midlands between Birmingham and Norwich may be just the kind of place Elon could be looking for.
That area is known locally as Motorsports Valley. Nine of the eleven Formula One teams have their headquarters there, which means there is a massive pool of manufacturing and engineering talent assembled in that 80 mile long corridor. Even Haas F1, an American team with corporate headquarters in Concord, North Carolina — the center of gravity for NASCAR teams — elected to establish its Formula One team in Motorsports Valley.
People have gone so far as to suggest that one reason Ferrari has struggled lately is that it is not located there. It’s not that Italy doesn’t have its share of talented engineers, it’s just that there is such a high concentration of them in Motorsports Valley that the culture encourages the best and the brightest to gravitate there. Musk says, “It amazes me how much British talent there is in that.” Approximately 41,000 people are employed by the Formula One teams or the companies that support them.
Professor David Bailey, an automotive industry expert at Aston University, says it would be a logical for Tesla to consider a factory — either to make batteries, automobiles, or both in the Midlands. “A British engineering base would make a lot of sense for Tesla. The Midlands, for example, has what I call a ‘phoenix industry’ of cutting-edge firms working in low carbon and driverless automotive technologies, linked both to universities and the motorsport industry. Just as automakers go to Silicon Valley to tap into software design, so, too, auto firms come to the UK for design and engineering skills and technology.”
Tesla is where most top engineers want to work as it leads the automotive world and the world to a zero emissions future. Tesla recently announced the acquisition of one of Germany’s most respected engineering firms — Grohmann Engineering — as part of its quest to reinvent the process of manufacturing. Musk is fixated on increasing the speed and efficiency of manufacturing. He calls it “building the machine that makes the machines.” He suggests that factories of the future could increase their production speeds by between 10 and 100 times.
“Tesla is going to make some very significant investments in Europe,” Musk told The Telegraph recently. “There is no question of at least one, maybe two or three Gigafactory locations in Europe in the future. We think it is the right thing to do is to start producing cars there as soon as we can reasonably do so.” Musk says he does not see Brexit and the current climate of financial insecurity surrounding Britain as having “a significant impact” on Tesla’s plans.
Can Tesla continue to acquire new businesses and build new plants when it is just barely profitable? After all, it will only make between 80,000 and 90,000 cars this year. That makes it one of the smallest car companies in the world. But Musk is the consummate optimist. He says Tesla will be the most valuable company in the world some day.
Meanwhile, its stock has more short sellers — people who bet the price will go down rather than up — than any other on the New York Stock Exchange. Musk cares not one whit for conventional wisdom. “Brash” is much too mild a way to describe him. Maybe the answer is to look at all the other car companies racing to catch up with him. Elon Musk seems to have a secret nobody else can fully visualize.