Tesla's "Advanced Automation" Division Gears Up for Model 3 Production

Tesla is devoting all the resources of a German engineering company it acquired last year to Model 3 production.

Tesla assembly line
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Last year, Tesla announced plans to acquire German engineering firm Grohmann Engineering and reconstitute it as "Tesla Advanced Automation Germany." Now, the carmaker is using all of its new possession's resources to gear up for Model 3 production, reports say.

As an independent company, Grohmann had a client list that included other automakers. But it recently announced that it would drop all other clients and focus solely on Tesla, according to Electrek. Tesla is focusing on improving its manufacturing process as it works to launch the Model 3, and the creation of Tesla Advanced Automation Germany is understood to be a part of that project.

A streamlined manufacturing process is key to meeting Tesla's ambitious goals for the Model 3. CEO Elon Musk wants the company to be building 500,000 cars a year next year, the more affordable Model 3 will make up the majority of that total. Tesla also has hundreds of thousands of reservations for the car. But the company has also missed every one of its deadlines for new-car launches so far.

Musk previously said the new outfit would honor contracts already entered into by Grohmann Engineering. But a recent report from German-language news outlet S├╝dwestrundfunk indicated that the group was in the process of ending all relationships with outside clients, including canceling existing orders.

The shift comes amid some instability within the group itself. At a recent Grohmann Engineering employee meeting, Tesla CTO JB Straubel announced that founder Klaus Grohmann was retiring. About half of the roughly 680 employees are also reportedly attempting to unionize. This comes as Tesla deals with a unionization push at its Fremont, California, assembly plant.

It's unclear what role Tesla Advanced Automation Germany will have in the initial rollout of the Model 3. Tesla may be planning to use some of Grohmann Engineering's automation expertise right off the bat, but the group's European location hints that it may be more geared toward an eventual expansion of car production outside the U.S.