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Elon Musk's plan to build a new Tesla factory in Germany makes no sense. Here's why. (TSLA)

Elon Musk's plan to build a new Tesla factory in Germany makes no sense. Here's why. (TSLA)
Xinhua via Getty Images



Tesla CEO Elon Musk announced last week that a new factory is planned for Germany, in the Berlin area.




This is a bad idea. The European auto industry already has too many factories for the region's level of demand.




The European auto market also isn't growing.




A shift to electric vehicles could happen, but it would be far more sensible for Tesla to take over an existing plant or hire a manufacturer to build its cars.




Musk's addiction to storytelling is driving this decision.




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Last week, Tesla announced that it would build a new Gigafactory — Tesla's term for a rather grandiose term for a car plant — near Berlin.
That would bring the Tesla Gigafactory count to four, with facilities in Nevada, New York state, China, and now Germany. Not all of these plants are explicitly for vehicle assembly, but they could be if needed. By reckoning, this means Tesla has committed to building more factories than any other established automaker in the world.
Tesla could offer some industrial logic for a plant in Shanghai, given that China is likely to be the world's best growth market for all-electric vehicles and that Western car companies prefer to build vehicles where they sell them.
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