Tesla to Buy Germany’s Grohmann Engineering

Tesla Motors Inc. has agreed to buy Germany’s Grohmann Engineering GmbH to help the carmaker ramp up its production capabilities ahead of the planned launch of the high-volume Model 3 midsize electric sedan next year.

Financial terms of the deal, which is expected to be completed early next year, weren’t disclosed. Tesla will form a new division called Tesla Grohmann Automation that the company says will create 1,000 engineering and technician jobs in Germany over the next two years.

The team, which will be based at Grohmann’s headquarters in Pruem, will help design a new automated manufacturing systems that Tesla will use at its Fremont, Calif., assembly plant. Tesla predicts the system will yield “exponential” improvements in production speed, quality and efficiency.

Tesla hopes to start building the $35,000 Model 3 car late next year in Freemont, which also builds the company’s Model S sedan and Model X SUV. The company expects total production at the plant will reach 500,000 units per year in 2018, a tenfold increase over current output there. More than 300,000 people have put down deposits to reserve a Model 3.