Tesla's German Subsidiary Didn't Warn Clients It Was Ending Contracts To Focus On The Model 3

Photo: Tesla

Tesla’s acquisition of German engineering group Grohmann hasn’t gone entirely smooth, evident by the dust-up between Elon Musk and the former head of Grohmann. Reports emerged last month that Grohmann was ordered to drop all clients to focus entirely on Model 3. Now, it seems those other legacy clients—namely BMW, Bosch and Daimler—weren’t made aware of that decision ahead of time. And they’re still expecting work to be completed by Grohmann.

“Of course, we expect suppliers to fulfill their contracts and agreements,” a Daimler spokesperson told Jalopnik on Friday.


The automaker declined to comment further, but BMW told Reuters that it also believed “Grohamnn will honor its contractual obligations toward us” and said it had not been formally notified about any changes to its contract.

The decision to focus entirely on Tesla projects led to the recent dismissal of Grohmann’s head, Klaus Grohmann, who reportedly disagreed with how Musk wanted to treat the company’s existing clients. Ultimately, Musk got his way—and Grohmann left the company.

A Tesla spokesperson said, without much elaboration, that it’s working on to addressing the situation. “We have been in contact with every client for weeks on this issue and are on the way to finding individual solutions with each of them,” the spokesperson told Jalopnik.


Musk has made an effort to quell any unrest at the Grohmann factory, offering workers a pay increase after concerns were raised about the decision to drop all existing clients.

The German workforce threatened to call a strike, backed by the IG Metall union, but the company said the situation shouldn’t impact its July production launch for the Model 3 Sedan.

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Ryan Felton

Senior Reporter, Jalopnik/Special Projects Desk

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