- Tesla is believed to be looking at sites in the Canadian provinces of Ontario and Quebec for a new gigafactory.
- The EV maker officially opened two new plants this year—in Berlin and Texas—but has struggled to bring both up to their optimal production capacity.
- Canada is believed to be a finalist for the next gigafactory location due to proximity of crucial raw materials and their processors.
After the launches of the Austin and Berlin gigafactories earlier this year, one might have expected Tesla to focus solely on cranking up output at its existing plants given new supply chain pressures and the rising cost of raw materials. But the Austin-based EV maker appears to be deep in the planning stages of yet another factory, this time just over the border from rivals in Michigan.
In recent weeks a flurry of activity by Tesla has been noted by industry observers to be taking place in the province of Ontario, ahead of an expected announcement by Tesla CEO Elon Musk later in 2022. The CEO had hinted in recent months that the search for a new plant location in North America was under way, with Tesla execs having visited a number of mining sites in recent months. The locations of the mining sites, and their relative proximity to Canada's auto production hubs in Ontario, has sparked speculation that Tesla could be planning to build a new gigafactory in Ontario or Quebec.
A gigafactory in Canada would bring the automaker's number of plants up to seven, with Canada having the distinct advantage of nearby raw materials that could be transported with relative ease by rail to refining plants and other sites in the country's auto industry hub, which hosts a number of suppliers. This potentially makes Ontario and Quebec natural leaders, in the estimation of a number of industry observers, for Tesla's next plant in North America, offering a much shorter supply chain than in other sites outside the US like Berlin and Shanghai.
However, at the moment Tesla faces a number of challenges in getting its recently opened plants up to their designed production capacity, with Berlin, Shanghai, and Austin all having experienced significant downtime this year for several reasons, ranging from COVID mitigation measures to permits to parts shortages. Assembly quality continues to be as pressing an issue as in the distant past for the automaker.
As industry experts have pointed out, Tesla appears to be rushing to build and open new factories, including in the middle of a pandemic, but then spends close to a year or more slowly getting those plants up to their optimal production volume, burning a lot of cash in the process as Elon Musk himself noted. These are issues far more common to entirely new startups, rather than established automakers with over a decade of experience, which Tesla happens to be.
Industry chatter about a possible Tesla plant in Canada have intensified just a couple of weeks after Volkswagen and Canadian officials have formalized plans for the German automaker to source a number of crucial raw minerals in the country aimed at EV production. German Chancellor Olaf Scholz, along with former VW CEO Herbert Diess, visited the country to sign a memorandum of understanding to investigate opportunities for Canada to supply European sites with metals used to manufacture EV batteries.
Should Tesla base a new gigafactory in Canada, or somewhere else in the US? Let us know in the comments below.
Jay Ramey grew up around very strange European cars, and instead of seeking out something reliable and comfortable for his own personal use he has been drawn to the more adventurous side of the dependability spectrum. Despite being followed around by French cars for the past decade, he has somehow been able to avoid Citroën ownership, judging them too commonplace, and is currently looking at cars from the former Czechoslovakia. Jay has been with Autoweek since 2013.
