Tesla will import Model Y from China amid German plant delays

Tesla is expected to start European deliveries of its China-built Model Y crossovers in a few weeks.

The first vehicles will be handed over to customers in Germany in August, the German news agency dpa reported, citing an official Tesla communication.

The vehicles will be exported from Tesla's factory in Shanghai.

Tesla originally planned to start production of the Model Y in July at its new European factory in Gruenheide near Berlin, with deliveries scheduled to begin in the third quarter, but the plant's production start has been delayed to the end of this year or early next year.

The Model Y will compete against premium compact and midsize crossovers and utility vehicles just as sales of electric cars are beginning to boom in Europe. The crossover is slightly larger than Tesla's first mass-market car, the Model 3 sedan.

Tesla's European sales increased 42 percent to 41,230 in the first five months, according to data from JATO Dynamics market researchers. The Model 3 was the best-seller with sales of 40,858. The company also sold 277 Model X midsize crossovers and 155 Model S upper-premium sedans.

CEO Elon Musk has said the Model Y has the potential to outsell all other vehicles the company builds. China and the U.S. are Tesla's biggest markets.

Tesla has faced a series of setbacks to opening its German factory, with Musk expressing dissatisfaction with the complex regulation and red tape tangling up the opening of the plant.

The U.S. automaker wants to produce around 500,000 Model Y and Model 3 cars annually in Gruenheide. The company still lacks the final environmental permit for the construction.

Officials from Brandenburg state, where the plant is located, said last week that Tesla had constructed tanks on the site without approval and said they were preparing to fine the automaker.