Before the year is over, Elon Musk wants to start production at Tesla’s new electric-vehicle factory outside Berlin. While he’s cautioned that ramping up Model Y output at the facility in the small town of Gruenheide will be challenging, the development is the talk of the German auto industry nonetheless.

Volkswagen CEO Herbert Diess last week urged his German workforce to brace for more radical changes as the company tries to keep pace with Tesla, which aims to eventually churn out 500,000 EVs a year at Gruenheide. The new factory will probably take 10 hours to assemble an EV, compared with the more than 30 hours it takes VW.

"Tesla will enter a new dimension in Europe with this new location,” said Diess, who has a mildly awkward "frenemy” relationship with Musk.