Volkswagen plans to build new factory in Germany to counter Tesla

Volkswagen said on Tuesday it is preparing to build a new auto factory close to its headquarters in Wolfsburg, Germany, hoping to raise its significance as the opening of Tesla Inc’s gigafactory near Berlin can affect the German automaker’s significance.

The plant, which still needs approval from Volkswagen’s supervisory board in the near future.

The plant is part of the group’s Trinity project under which the automaker aims to build a flagship electric sedan in Wolfsburg from 2026.

Volkswagen has provided no cost estimate for the factory as of yet. The automaker said it aimed for a production time of 10 hours per vehicle for the Trinity model, same as how long it will take Tesla to assemble the Model 3 at its planned site in Gruenheide.

Constructing an all-new plant is an alternative to adapting the present Wolfsburg plant to produce the Trinity model, which the automaker says would limit the possibilities for more modification to the manufacturing process.

“That’s why we’re planning greenfield construction: efficient and without limitations by existing structures,” Volkswagen brand CEO Ralf Brandstaetter said.

“That way we are gaining time and space to gradually modernize the main factory in a far-reaching way and raise production there, too, to a new level.”

Volkswagen’s Trinity model is looking for a level 4 autonomous standard, in which the car can handle all aspects of driving in most circumstances without requiring human attention.

CEO Herbert Diess has benchmarked Wolfsburg against Tesla’s German gigafactory, arguing that VW’s main site was way behind when it comes to efficiency and speed.