Explainer: What’s going to occur to Tesla’s $ 7 billion German “Gigafactory”?

GRUENHEIDE, June 22nd (Reuters) – Next Thursday, July 1st, Tesla was supposed to be a festival: the opening of its self-proclaimed “Gigafactory” in the tranquil German town of Grünheide just outside Berlin.

But when the first vehicles will roll off the assembly line in the first European plant of the electric car manufacturer, it is completely unclear thanks to fierce environmental resistance, bureaucracy and planning tweaks.

Tesla has already postponed the planned opening to the end of 2021. However, the environmental agency in Brandenburg, the state in which the 5.8 billion euro facility is being built, has not yet issued final approval – a further delay cannot therefore be ruled out, even until 2022.

WHAT IS THE PROBLEM?

It’s complicated.

Tesla and its billionaire boss Elon Musk revealed plans to build the factory in late 2019.

However, the site partially overlaps with a drinking water protection zone and borders a nature reserve, which has met with fierce resistance from residents and environmental groups.

Last year, Tesla was forced to suspend clearing a forest on the site after environmentalists from local group Nabu highlighted the risk to a rare local species of snake whose hibernation could be disrupted by tree-felling activities.

The queues had to be rescued before Tesla could proceed, but there were numerous other efforts to halt work on the site for environmental reasons.

“Thousands of hectares of forest are being cleared to create the necessary infrastructure and living space,” says Manuela Hoyer, who lives about 9 km from the site and is a member of a local campaign that speaks out against it.

“Building such a system in a drinking water protection area is actually a crime against the environment.”

Your comments reflect a broader trend in Germany that has also resulted in renewable projects like wind farms being fired at by residents who fear the impact on local living space.

IS THAT REAL?

No.

Tesla also gave the bureaucracy a headache and presented the company’s practical approach to Germany’s notorious bureaucracy.

So far, Tesla has been operating on the basis of preliminary building permits, with large factory floors and structures already being built on the 740-acre property it bought for € 43.4 million.

However, the facility can only be opened once the Brandenburg State Environment Agency has given its final approval.

She has said before that she cannot say when every project that received preliminary approval in Brandenburg finally received the final OK.

But that doesn’t stop environmentalists from throwing screws at the plant.

Last week, the Green League and Nabu filed an injunction against provisional building permits for the site with a German court to ensure Tesla was complying with environmental laws. Continue reading

“I think there could be less bureaucracy, that would be better,” said Musk on his last visit to Grünheide in May, much less enthusiastically than his verdict “Germany rocks” eight months earlier.

THE BATTERY CELL SYSTEM

Tesla’s construction plans had to be completely re-submitted earlier this month to accommodate the start of battery cell production at the site, which cost valuable months. Continue reading

The Grünheide plant comprises several units for component production and final vehicle assembly, including a press shop, foundry and body shop.

This also includes a water recycling plant, a local fire brigade and a depot to ensure more efficient transport of components and other goods. The plan is to cover the site’s electricity needs from local renewable energy sources.

But adding battery cell production meant the company had to tweak and re-submit the entire application. Based on the latest version, the system will have a capacity of 500 million cells with a total of 50 gigawatt hours (GWh) per year.

That is more than the 40 GWh plant competitor Volkswagen (VOWG_p.DE) wants to build around 300 kilometers west in Salzgitter near its home site.

IS SOMEONE SUPPORTING THE FACTORY (EXCEPT ELON)?

Yes.

Tesla’s move is seen as a major boost for East Germany, which is grappling with high unemployment rates and difficulties attracting large industrial companies.

When fully operational, the facility, which Tesla said will be “the world’s most advanced high-volume electric vehicle manufacturing facility,” will create 12,000 jobs and have a capacity of up to 500,000 cars per year.

“We are in favor of a switch to emission-free mobility and the cars required for this have to be built somewhere,” said Ralf Schmilewski, Green founder in the neighboring town of Erkner in Grünheid.

He said Tesla’s plans also address a demographic problem that resulted in younger generations abandoning the underdeveloped areas in their desperate search for jobs.

“Now they have a perspective and don’t have to move.”

WHAT’S NEXT?

Until mid-July, the public in the Grünheide town hall can view the approximately 11,000 pages of Tesla’s application documents, including construction plans, tables and calculations, for the third time.

As part of the procedure, anyone can file an objection until August 16, before the Brandenburg Environment Agency decides on September 13 whether a public discussion should take place.

More than 400 objections were raised when the documents were last made publicly available in 2020.

After that there is no clear timetable. At some point, the authority should give the final approval – but when is still unclear.

($ 1 = 0.8410 euros)

Reporting by Nadine Schimroszik and Christoph Steitz; Editing by Pravin Char

Our Standards: The Thomson Reuters Trust Principles.

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