Tesla Expands European Lineup Amid Operational Headwinds

Tesla launches a 7-seat Model Y in Europe with a €2,500 premium, as its Berlin Gigafactory faces pressure and autonomous driving progress diverges between the US and Europe.

Tesla is introducing a new configuration for its popular Model Y crossover in Europe, adding a third row of seats to accommodate seven passengers. This move comes as the electric vehicle manufacturer navigates challenges at its German production facility and faces scrutiny over the pace of its autonomous driving initiatives.

Seven-Seat Model Y Arrives with Premium Price Tag

The new seating option is currently exclusive to the Long Range All-Wheel Drive version of the Model Y and commands a significant premium. European customers can now order the vehicle with the extra row for an additional €2,500. In Germany, this raises the starting price from €53,970 to €56,470. Deliveries for this configuration are scheduled to commence in April 2026, following a launch in the United States that occurred approximately six weeks prior. The expansion is seen as a strategic play to better compete in the family SUV segment against rivals like the Mercedes EQB and the Kia EV9.

Berlin Gigafactory Faces Mounting Pressure

Simultaneously, Tesla's operations in Grünheide, Germany, are under increased scrutiny. CEO Elon Musk recently informed employees that expansion plans for the Berlin-area plant are contingent on the influence of external organizations. This statement coincides with upcoming works council elections, where the influential IG Metall union aims to secure a controlling influence. The European market remains critically important for Tesla, especially after a challenging 2025 which saw the company's regional sales decline by approximately 38%.

Diverging Paths for Autonomous Driving Projects

Tesla's progress in autonomous vehicle technology presents a mixed picture across different regions. The company anticipates regulatory approval for its Full Self-Driving (FSD) software in the Netherlands by March 20, 2026. In stark contrast, its robotaxi project in California appears stalled. Official state data reveals that Tesla logged zero autonomous test miles there throughout 2025. Since 2016, the cumulative total of autonomous testing in California stands at just 562 miles—a figure far below the 50,000-mile benchmark typically required by regulators for commercial driverless testing. Tesla has not submitted applications for higher-level driverless permits in the state and instead continues to operate limited services in Austin and San Francisco with human safety drivers behind the wheel.

Production Shifts and Extended Wait Times

In other company developments, new orders for the recently unveiled Dual Motor All-Wheel Drive Cybertruck, priced at $59,990, are facing estimated delivery timelines exceeding one year. Concurrently, Tesla has confirmed it will cease production of its flagship Model S and Model X vehicles. The manufacturing capacity freed up by this decision will be reallocated to support the production of its humanoid Optimus robots.