Tesla Buys German Manufacturer to Turbocharge Vehicle Production

In the final days before the vote on its proposed merger with SolarCity, Tesla is making another move.

The company announced Tuesday that it’s acquiring Grohmann Engineering, a 700-employee German manufacturing firm. That company will become Tesla Advanced Automation Germany and, if all goes to plan, will help Tesla significantly ramp up the production of its vehicles.

Grohmann doesn’t make cars–it makes machines that makes cars. On a blog post on its site Tuesday, Tesla referred to Grohmann as “one of the world leaders in highly automated methods of manufacturing.”

“This will really be our first acquisition of significance in our whole history,” Musk said on a conference call, according to Tech Crunch.

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Tesla is scheduled to begin producing the $ 35,000 Model 3 in mid-2017 and ship late in the year. The company has already received nearly 400,000 preorders and says it wants to deliver all of them within a 12-month time frame.

Currently, Tesla is capable of producing around 100,000 cars per year, so it will have to significantly increase that number to keep up with demand of just the Model 3. It has already opened portions of its Nevada gigafactory to produce batteries for the vehicles.

Musk has previously cited Tesla’s capacity for production as an area where the company needs to improve. He has high hopes: Tesla’s goal is to manufacture 500,000 cars per year by 2018.

Tesla and SolarCity, both founded by Musk, are scheduled for separate shareholder votes on November 17 that will determine whether the car company can buy the solar energy company for around $ 2.6 billion. Musk has maintained that the merger is necessary to help both companies achieve their maximum potential.

Tesla has made a flurry of announcements in the weeks leading up to the vote to acquire SolarCity, which has never posted an annual profit. Tesla announced a partnership on October 16 that will allow it to produce solar panels at Panasonic’s manufacturing plant in Buffalo, New York. On October 19, it revealed that all its cars would be equipped with fully autonomous capabilities beginning in 2017. And on October 28, Musk unveiled Tesla’s new solar roofs, which look like regular roofs and store solar energy with 98 percent the efficiency of standard solar panel.

Meanwhile, the company beat third quarter revenue expectations by $ 300 million and posted its first profitable quarter in three years.

In late October, Ben Kallo, senior research analyst at Baird, said he believed the Tesla-SolarCity deal had a 90 percent chance of being approved.

Tesla didn’t reveal how much it will pay in the Grohmann transaction. In its blog post, Tesla said it expects to add 1,000 jobs in Germany over the next two years. It hopes to receive regulatory approval and close the deal by early 2017.

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