Tesla awaits green light for production in Germany


GRÃœNHEIDE, Germany – Elon Musk’s push to transform Tesla Inc.

TSLA 0.82%

Becoming a global automaker and boosting electric vehicle sales in Europe with a new plant in Germany is approaching what could be its final hurdle.

Those who opposed the site – and in some cases attempted to derail Mr. Musk’s plans – have until Oct. 14 to voice their final objections to the planned plant. The national environment agency will then assess the complaints, with 814 already on hand. They include objections to deforestation and concerns about the impact on wildlife and drinking water.

German officials say they expect the plant to be approved, possibly as early as this year. If he does not succeed, however, Tesla could be forced to demolish any buildings he has already erected and return the site to its natural state.

If approved, Tesla says it could build up to 500,000 vehicles a year here, starting with its Model Y crossover vehicle.

Over the weekend, Mr Musk opened the gates to the site in Grünheide, a confederation of six villages in the Brandenburg countryside, just across the state border from Berlin. He held a one-day “county fair” and answered questions from the crowds that gathered.

“We aim to start producing cars in a few months – November or December – and deliver the first cars in December,” he said.

Commenting on local environmental concerns, Mr Musk told the crowd: “We planted trees. And we use very little water.

The event looked like a typical German Oktoberfest celebration, with strobe lights, a giant ferris wheel, a stage with a DJ playing booming techno music and beer. Mr. Musk, who sometimes struggled to read the German remarks on the stage set up on the factory grounds, answered questions from audiences that ranged from his tastes in music, which he said were “broad. When asked if the Cybertruck, Tesla’s planned pickup would come to Europe.

“We would be happy to bring it here if they let us,” Mr. Musk said.

Tesla’s expansion in Asia began in earnest two years ago, when it began delivering vehicles from its Shanghai plant, its first outside of Fremont, California. The move fueled rapid growth in Tesla shipments and helped make the company the most valuable automaker in the world.

To date, all Tesla sold in Europe have been imported from the United States or China. A local site in Europe could give Tesla more leverage to compete with the growing number of models from European brands. Local vehicle production would reduce costs associated with imports such as tariffs and shipping, and remove a logistical bottleneck when global supply lines are stretched.

The factory comes as the competitive pressure Tesla faces in Europe, as elsewhere, has intensified. Volkswagen AG

ID.3 overtook Tesla’s Model 3 as the best-selling all-electric vehicle in Europe in August, according to Jato Dynamics, a research group. Volkswagen sold 7,904 ID.3 models, compared to 7,824 Model 3. From January to August, Tesla’s Model 3 was still the best-selling all-electric car, with nearly twice as many models sold as the ID. 3 from VW.

Sales of electric cars in Europe hit a turning point in August when they first surpassed those of diesel vehicles. That month, electric vehicles accounted for around 21% of total new car sales in Europe, still behind conventional cars.

“We have seen a fundamental shift in buying habits as more attractive models entered the market and consumers realized the benefits of electric vehicles,” said Felipe Munoz, analyst at Jato Dynamics.

Tesla says it could build up to 500,000 vehicles a year at its German plant, starting with its Model Y crossover vehicle.


Patrick Pleul / Zuma Press

Powerful German automakers — Volkswagen, Bayerische Motoren Werke AG

and Daimler AG’s Mercedes-Benz – had long rejected Tesla’s early success. They are all now building plug-in vehicles and setting deadlines to ditch internal combustion engines.

Tesla has received preliminary approval for 14 of 16 planned construction projects related to the plant, including base manufacturing facilities and the paint shop. Brandenburg Prime Minister Hubert Dietmar Woidke said last month that approval of the plant was possible this year.

The road has not been easy, and Mr Musk has targeted the regulatory process in Germany, sometimes complaining on Twitter about the duration of the construction. Mr Musk had said in August that production could begin in October, before revising the forecast during the recent event in Berlin.

An environmental impact study forced the company to relocate endangered animals from the forest before cutting down trees. In December 2020, a German court forced Tesla to stop clearing forest on a small strip of land adjacent to the highway and railroad tracks, saying clearing trees could harm hibernating sand lizards and do not was not essential to the future operation of the plant. After environmentalists expressed concern over the plant’s impact on water levels, Tesla made several changes in an attempt to address it, although opposition remains.

Some delays are self-inflicted. Tesla changed construction requests, forcing state officials to restart the process that allows citizens to submit objections to the plant. Brandenburg officials say they are working as fast as possible and have supported Tesla by using fast-track legislation to speed up industrial investments like Tesla’s.

The automaker enjoys the support of some ordinary citizens. “I just don’t understand why some people are against the factory. Tesla brings jobs. They should be happy about it, ”said Anita Ketelsen, a retiree who drove with her husband to the weekend event, arriving at their mobile home early to get a ticket.

Mr. Musk still faces opposition from powerful German unions. They welcome the jobs but warn Mr Musk that he must obey German rules.

Birgit Dietze, head of the Brandenburg branch of the German union IG Metall, said that according to information gathered by the union, Tesla offers workers 20% lower wages than union contracts at other companies such as BMW. , Daimler or Siemens AG. Tesla did not respond to a request for comment on wages at the plant.

In western Germany, IG Metall negotiates broad wage agreements that apply to almost all companies in a particular industry. But this system has not been widely adopted in East Germany, where the Tesla factory is being set up. BMW and Porsche, for example, individually negotiate wages with IG Metall for their plants in Leipzig.

Employees of companies of a similar size to Tesla in Brandenburg also have the right to form a works council, a non-union union representation in a company elected by the workforce that has a say in everything from hiring and firing staff to plant operations.

Write to William Boston at [email protected]

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