Dreame is planning a luxury electric car factory in Brandenburg – What does that mean for Tesla?

Dreame is planning a luxury electric car factory in Brandenburg – What does that mean for Tesla?

A new chapter in electromobility could open in Brandenburg. The Chinese company Dreame is planning to build an electric car factory in the state, which is not only causing a stir within the industry, but also points to the potential for healthy competition in the automotive sector. Dreame, which has its origins in the manufacture of household appliances such as vacuum cleaners, is one of a group of Chinese companies that have recently expanded into the booming automotive sector. Industry expert Beatrix Keim, head of the Center of Automotive Research (CAR) at the University of Duisburg-Essen, is surprised by this development and calls it a “signal that Tesla is no longer taken seriously by Chinese manufacturers.”

The continuous expansion of Chinese companies into the European market can be attributed to several factors. The electric car market in China is highly competitive, forcing many companies to look for new opportunities abroad. Recent reports show that over 500 electric car startups have been founded in China in recent years, of which only about 100 have survived. With a planned factory in Germany, Dreame hopes to overcome the hurdles of the European market. The state government of Brandenburg has already confirmed initial contacts with Dreame, but has not published any specific details about the discussions. Prime Minister Dietmar Woidke (SPD) simply said that there are ongoing negotiations.

Dreame's strategy

Dreame plans to produce luxury electric cars, targeting the needs of a market that does not yet have enough affordable electric vehicles in Europe. This opens up economic opportunities for startups like Dreame, especially in view of the demand situation in Europe that is not yet sufficiently served. The first vehicles are expected to roll off the assembly line in Germany as early as 2027. Company boss Yu Hao, who holds around a third of the shares, is largely responsible for the choice of location and has already put together a team of almost 1,000 employees to realize the ambitious plans.

Choosing Brandenburg as a location has several advantages. An existing supply chain and reduced logistics costs could play into Dreame's hands. In addition, Chinese companies are aware of the strict labor laws and requirements for working conditions when setting up in Germany. These aspects can represent a challenge, but can also be a sign of commitment to the German market.

Market developments and competitive environment

In the global context of electromobility, current figures show a mixed picture. Although the sales market for battery electric vehicles (BEV) grew by almost 10% to around 11 million vehicles sold, Europe recorded a decline in the overall vehicle market of -4% over the same period. For 2024, around 1.9 million BEVs were sold in Europe, whereas the market in China grew by 6% in 2024, confirming China's leading position in the e-mobility sector.

Dreiame’s decision to invest in Germany is in the context of these market-relevant challenges. In particular, the EU Commission's planned tariffs on electric cars manufactured in China could be a reason for expansion in Europe. Various Chinese companies already have similar plans to avoid tariffs and produce locally.

Finally, it remains to be seen how Dreame will manage to establish itself in a market characterized by high quality and technological requirements. The creation of a new factory in Brandenburg could represent a turning point for both the Chinese car manufacturer and the German automotive industry. While some experts give temperature assessments about future competitiveness, the possible settlement still signals an interesting trend in the global competition in electromobility.