Tesla has received authorisation to start commercial production at its new factory in Berlin, according to local German officials. After months of delays, the conditional licence for the vehicle and battery factories in Brandenburg was finally granted. Tesla had planned to begin vehicle manufacturing in early summer of 2021, but the Covid epidemic, supply chain issues, and conflicts with environmentalists all hampered its progress.
The plant, which would be capable of producing up to 500,000 automobiles per year, was approved in a 536-page ruling. Tesla will not be able to begin production straight away as a result of the approval. A public comment period, as well as additional final inspection conditions, such as air pollution management and water usage, are all part of the licence.
The Brandenburg state environment agency issued the permit. A translated release announcing the approval called the plant “a great success for Brandenburg.” Following the inauguration of Tesla's Gigafactory 3 plant in Shanghai in late 2019, the German factory is critical to the company's global expansion aspirations. It is also expected to open a facility in Texas in the near future.
When Tesla CEO Elon Musk revealed plans to build a car plant in Germany in November 2019, he praised German engineering. He said: “Everyone knows that German engineering is outstanding, for sure. That’s part of the reason why we are locating our Gigafactory Europe in Germany. We are also going to create an engineering and design center in Berlin, because Berlin has some of the best art in the world.”
The production hall of the Tesla Berlin during the open day last year.
Although the plant's approval took longer than Tesla had anticipated, local officials described the process as "unique in a number of respects." The State Office for the Environment "inspected and approved not just a business, but an entire industrial district with many large-scale plants and frequent public engagement" in a "quite short time," officials added.
In 2020, Tesla committed to reduce water consumption at its new factory by more than a third in response to activists' requests. That year, the corporation had to temporarily halt its building plans, including the destruction of a pine forest, in order to demonstrate that the move would not damage hibernating snakes and lizards in the vicinity.
Tesla's water utility contract in Brandenburg is still in the works. Local environmentalists are likely to argue in an administrative court hearing on Friday that the Brandenburg environmental ministry failed to undertake necessary reviews before granting the local water company a licence to fulfil a contract with Tesla. The plaintiffs argue that the factory would consume enough water to feed a 30,000-person village.
If the environmentalists prevail, Tesla will have to wait for the water utility to negotiate with local governments about where the water needed to run Tesla's new factory can be obtained. Tesla has been selling into the region and competing against European manufacturers such as Volkswagen and Audi in recent years by exporting automobiles from its Shanghai plant.
According to Canalys research, 6.5 million electric vehicles were sold worldwide in 2021 (including 4.5 million battery-electric vehicles). Last year, 2.3 million electric vehicles were sold in Europe, accounting for 19% of all new automobiles. Battery-electric vehicles, such as those built by Tesla, accounted for just over half of all new electric vehicle sales in Europe, or 54 percent.
The news was crucial for Tesla, which had rushed to start building on the $7 billion factory two years ago without waiting for German clearance, risking having to demolish it if the approval was not obtained.
Tesla made no immediate response following the announcement. Dietmar Woidke, the governor of Brandenberg, a German state near Berlin where the factory is located, said the business had set a two-week deadline for finishing the remaining stages before starting production.
Tesla set sales records in 2021, the year it became the first trillion-dollar automaker in the industry. The new plant is expected to boost the company's revenues in Europe, where its electric vehicles are currently among the best-selling. The entrance of the American behemoth has served notice to Germany's traditional automakers that they must up their game or risk losing out to a firm that is considered as a tech behemoth as well as a competitor.
The factory will be Tesla's third, following those in Fremont, California, and Shanghai. Another is set to open in the near future outside of Austin, Texas.