The founder of Tesla Motors (NASDAQ:TSLA), Elon Musk, announced on Tuesday that the business is purchasing the German firm Grohmann Engineering. This is a significant move for Tesla, one that will help them make the 500,000 electric cars they want in a year because it’s going to enhance their production capacities by a great deal.

No mention was made about the price Tesla paid for the acquisition. Grohmann currently employs 700 people.

However, that figure is about to go up by a great deal as Tesla will be hiring 1,000 more skilled engineers within the next couple of years. They are all expected to work at the Grohmann plant, which will now work as the Tesla Advanced Automation Germany.

Grohmann Engineering Makes Machines to Produce Cars

Grohmann Engineering does not make cars. They create the factory machines that are used to make cars. Tesla says that the engineering firm is a world leader and a highly cherished acquisition because of their superior “automated methods of manufacturing”. Musk was naturally happy with the buy and said, “This will really be our first acquisition of significance in our whole history”. It’s an essential first step for making cars in Europe, he added.

The business has big plans for Europe. This year, they are expecting to sell close to 18,000 cars in the continent. But the production capacities are still low, and so the company wants to increase its investments. Musk said, “Tesla is going to make very significant investments in Europe… we’re going to be contributing a lot”.

Tesla’s Production Plans

Tesla has plans to start making the $35,000 Model 3 by the middle of next year, and start shipping them by the end of 2017. In fact, orders are pouring in already. The business has promised to deliver 400,000 preorders within 12 months. At this time, Tesla can make about 100,000 cars every year, but that number needs to go up quite a bit to meet the demand for the Model 3.

There will surely be others too for which the car maker must gear up its capacities. For this, portions of their Nevada gigafactory have been opened already to make batteries that can be used in the cars.

The Grohmann Engineering purchase is likely to be Tesla’s (NASDAQ:TSLA) final push before the Tesla- SolarCity merger. Shareholders are supposed to cast their votes on the merger plans on Musk on November 17.