Tesla Inc.’s plans to double capacity to 1 million electric vehicles at its factory near Berlin will need to win over locals that previously protested the site over concerns it’s depleting water supplies.
(Bloomberg) — Tesla Inc.’s plans to double capacity to 1 million electric vehicles at its factory near Berlin will need to win over locals that previously protested the site over concerns it’s depleting water supplies.
The US company will detail the proposal Tuesday at an event with local residents. The push comes even as the facility in the small town of Gruenheide currently runs at roughly half its interim capacity to make 500,000 vehicles annually.
Tesla’s efforts to start production in Germany was delayed for months by legal challenges from environmental groups worried the site would use too much water. While Elon Musk in 2021 laughed off the concerns, saying the region has plenty, it’s suffering from falling groundwater levels and prolonged droughts due to climate change.
Musk has suggested he may build a second European factory and got the red-carpet treatment during recent visits to Italy and France as leaders from both countries lobbied hard for the investment. In Germany, the company last month cut hundreds of workers, according to the IG Metall labor union.
While Tesla’s sales continue to grow, it’s been producing more vehicles than it’s managed to deliver even after substantial price cuts. The company isn’t close to making 1 million cars a year even at its most most productive plant in the world, in Shanghai. In March, Tesla said the Gruenheide site produced 5,000 vehicles in one week. If sustained all year long, that would translate to roughly 250,000 vehicles annually.
Any major expansion of the factory would require approvals from environmental authorities and likely would kick off another formal consultation process with locals who protested the first phase of Tesla’s plans because of the water issues.
Weeks after production at Gruenheide finally started, Musk referred to Tesla’s factories in Germany and Texas as “gigantic money furnaces” that were losing billions of dollars. In late 2021, the company decided to forgo €1.14 billion of German aid because it opted to try producing a new type of battery cell in Texas first.
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