Tesla Awaits Green Light for Production in Germany

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The plant near Berlin will boost Elon Musk’s efforts to transform the electric-vehicle maker into one with a global footprint

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German officials say they expect the plant to be approved early this year. If it doesn’t pass muster, however, Tesla may need to tear down all of the buildings that have already been erected and return the site to its natural state.

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

Mr Musk opened the doors of the site in Grunheide, a union of six villages in rural Brandenburg, across state lines from Berlin, over the weekend. He hosted a one-day “County Fair” and took questions from those gathered.

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

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

The event resembled a typical German Oktoberfest celebration, complete with fast-moving techno music and beer on a stage with strobe lights, a giant Ferris wheel, a DJ. Mr Musk, at times struggled to read comments in German from the stage set up in the factory grounds, asking questions from the audience that ranged from his taste in music, which he said was “broad”, whether Cybertruck , Tesla’s planned pickup, will arrive in Europe.

“If they let us do that we’ll be happy to bring it here,” Musk said.

Tesla’s expansion into Asia began two years ago, when it began delivering vehicles from its Shanghai plant, the first outside Fremont, Calif. The move sparked rapid growth in Tesla delivery and helped transform the company into the world’s most valuable carmaker.

To date, all Teslas sold in Europe have been imported from the US or China. A local site in Europe could give Tesla more power to compete against a growing number of models from European brands. Producing vehicles locally will cut costs associated with imports such as tariffs and shipping, and eliminate logistics bottlenecks as global supply lines grow.

The plant comes as competitive pressure in Europe intensifies, as has intensified elsewhere. Volkswagen AG’s

The ID.3 topped 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 3s. From January to August, Tesla’s Model 3 was still the best-selling all-electric car, with almost twice as many models sold as VW’s ID.3.

Electric-car sales in Europe were a watershed moment in August when they overtook diesel vehicles for the first time. That month, EVs accounted for about 21% of total new car sales in Europe, which still lags behind conventional cars.

“We have seen a fundamental shift in buying habits as more attractive models come to market and consumers become aware of the benefits associated with EVs,” said Felipe Munoz, an analyst at Jato Dynamics.

Powerful car makers from Germany – Volkswagen, Bayerische Motoren Werke AG

And Daimler AG’s Mercedes-Benz had long dismissed Tesla’s early success. All of them are now building plug-in vehicles and have set deadlines for abandoning internal combustion engines.

Tesla has received preliminary approval for 14 of the 16 planned construction projects involving the plant, which include key manufacturing facilities and a paint shop. Brandenburg’s prime minister, Hubert Dietmar Vodke, said last month that the factory’s approval could be conceivable this year.

The road has not been easy, and Mr Musk has targeted the regulatory process in Germany, sometimes complaining on Twitter about how long construction is taking. Mr Musk said in August that production could begin in October, before revising forecasts during a recent Berlin event.

An environmental impact study required the company to resettle 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 highway and railroad tracks, saying clearing trees could harm hibernating sand lizards and was not necessary for the future operation of the plant. After environmentalists expressed concerns about the plant’s impact on water levels, Tesla made a number of changes to address them, although opposition remains.

Some delays were self-inflicted. Tesla made changes to building applications, requiring state officials to revamp the process that allows citizens to submit objections to the plant. Brandenburg executives say they are acting as quickly as possible and have backed Tesla by using fast-track legislation to accelerate industrial investment like Tesla.

The carmaker enjoys the support of a few regular citizens. “I cannot understand why some people are against the plant. Tesla is bringing jobs. They should be happy about it,” said Anita Keitelsen, a retiree who accompanied her husband to a weekend event, arriving early to her mobile home to secure a ticket.

Mr Musk still faces opposition from Germany’s powerful unions. They welcome Jobs but warn Mr Musk that he must obey German rules.

Birgit Dietz, head of the Brandenburg chapter of Germany’s IG Metal union, said that, according to information gathered by the union, Tesla factory workers were paid 20% less than the level of union contracts at other companies such as BMW, Daimler or others. is offering. Siemens AG. Tesla did not respond to a request for comment about wages at the plant.

In West Germany, IG Metal negotiates comprehensive wage agreements that apply to almost every company in a particular sector. But the system hasn’t been widely adopted in East Germany, where the Tesla plant is moving up. BMW and Porsche, for example, negotiate wages individually with IG Metal for their plants in Leipzig.

Employees of companies similar in size to Tesla in Brandenburg also have the right to form a works council, which is a non-worker representation within a company elected by employees, covering everything from hiring and firing employees to plant operations. Something is there.

William Boston at [email protected]

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