On Tuesday morning Tesla announced that it had reached an agreement to acquire German firm Grohmann Engineering with the intent to more fully automate its factories and boost production of Teslas, especially the anticipated Model 3.
The resulting company will be called Tesla Grohmann Automation and the company will form the basis for a new headquarters called Tesla Advanced Automation Germany. In a blog post, Tesla noted that it hopes to build more Advanced Automation centers around the world.
The acquisition will keep Grohmann founder and CEO Klaus Grohmann in charge at the engineering firm’s Prüm, Germany site. According to Tesla, “several critical elements of Tesla’s automated manufacturing systems will be designed and produced in Prüm to help make our factories the most advanced in the world…we believe the result will yield exponential improvements in the speed and quality of production, while substantially reducing the capital expenditures required per vehicle.”
Grohmann engineering currently has 700 employees and Tesla says it wants to add 1,000 more over the next two years.
Tesla CEO has focused building a next-generation factory since the difficult launch of the Model X last year, which saw Tesla struggling to meet demand for the car from its Fremont, CA factory. In comments to press and on earnings calls, Musk has emphasized that the company’s factories will become more and more automated. In an August earnings call, the CEO said he wanted to build Tesla factories that look like an “alien dreadnought,” and to perfect “the machine that makes the machine.”
The company has also been under pressure from investors to ramp up its auto production significantly after promising an output target of 500,000 cars by 2018. In October, Tesla announced that it would likely hit its goal of 50,000 in 2016.
In a blog post announcing the proposed acquisition today, Tesla said that its Fremont factory, which was founded in 2010, had already increased production by 400 percent in the last four years.
Factory automation is already a big component of the company’s brand new Gigafactory outside of Reno, NV, where Tesla batteries are made. In July, Musk told USA Today that “the factory itself is a product, it’s the machine that builds the machines and demands more problem solving than the product it makes.”
In an interview with CNBC last week, speaking about the future of automation, Musk said that robots will take so many of our jobs that a universal basic income might be required.
According to Techcrunch, Tesla CTO JB Straubel said that Tesla “has been working with Grohmann in a partnership for the past few months, and found that the teams complemented each other well and were achieving a lot in terms of automation improvements, and determined they could do even more as a combined company.”
It is unclear how much Tesla has offered for Grohmann Engineering, and the deal will have to be approved by US and German regulators. Still, Tesla says it’s confident the deal will close sometime in early 2017.
Tesla has also bid to acquire solar panel installation firm SolarCity. That deal has been approved by regulators and investors in the two companies will vote on the deal November 17.