BYD to take on Tesla in Germany with new factory as Musk faces Giga Berlin backlash amid Model Y Juniper ramp

BYD is reportedly planning to open an electric car factory in Germany in order to avoid European tariffs by producing locally.

If approved, it will be BYD's third factory in Europe, after the ones in Hungary and Turkey come online with a capacity for 500,000 cars annually.

Citing illegal government subsidies, Europe increased the tariffs on Chinese vehicle imports by up to 35%, on top of an already existing 10% levy. BYD still continued to increase exports and widen model portfolio availability in Europe, as it is a vertically integrated EV maker that produces its own batteries and its prices are lower even with tariffs.

Despite having issues with worker productivity and labor or energy costs in Germany, BYD reportedly pegged the country as its top choice for building brand recognition among European customers. Chinese officials have also been touring VW factories slated to close, likely with the idea to take over and piggyback on the purpose-built infrastructure and skilled labor around them.

If the BYD factory in Germany materializes, the world's largest EV maker will be in direct competition with Tesla, which already has a Gigafactory near Berlin.

It is one of the facilities tasked with the complex production line retooling and manufacturing ramp that saw the new Model Y Juniper refresh, a successor of the world's bestselling vehicle, launch from four global Gigafactories at once.

Tesla, however, is currently having issue with staff morale at Giga Berlin, as its sick leave policy has seemingly led to suspension of payment to employees whose claims it considers dubious.

Apparently, Tesla found the amount of sick leave notices submitted recently extraordinary amidst the Model Y production ramp. It has challenged employees to "release their doctors from their duty of confidentiality" and inform their supervisors what exactly is wrong with them that isn't allowing them to work.

This has predictably led to a backlash as payment freeze for employees on sick leave is not allowed by German law, while Tesla tries to get around that by saying that it is simply withholding overpayment from previous slips.

Tesla's sales in Europe as a whole, and in Germany in particular, are cratering ahead of the Model Y Juniper production ramp, and next quarter will be crucial to gauge if it is because of Elon Musk's controversial political activism, or because potential buyers have been waiting for the new Model Y.

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