The automaker’s first European plant will help sales in a crucial region, but supplier challenges could persist.
Tesla
- Tesla receives approval from Brandenburg government for its Giga Berlin plant, expected to begin car production this year.
- The automaker’s first plant in Europe is expected to produce up to 500,000 vehicles per year, most of them headed to buyers in western Europe.
- Tesla has pushed back the start of Cybertruck production in the U.S. while it continues to build up production capacity for its best-selling models overseas.
Early this month Tesla cleared one of the last few hurdles for the planned start of production at its Brandenburg, Germany, gigafactory.
The EV maker has now received official environmental approval from the the State of Brandenburg to operate the plant, which is expected to produce some 500,000 Tesla vehicles per year. Final approval had been tied up in what Elon Musk at one point last summer described as “bureaucratic hell,” as Tesla seemingly faced a number of delays to complete the plant.
The EV maker is expected to begin production at the plant, known as Giga Berlin, in a matter of weeks, once it complies with the lengthy environmental requirements, with Tesla expected to use the plant mostly for Model 3 and Model Y production for European customers.
“The project, which was approved with the 536-page decision, includes the plant for the production of up to 500,000 vehicles per year, aluminum smelting plants and an aluminum foundry, plants for surface treatment, heat generation, and storage,” the Brandenburg state government said. “The facility also includes battery cell production, an operational wastewater treatment plant, a fire brigade equipment house, a high-bay warehouse, as well as laboratories and workshops.”
Tesla’s choice of a factory location near Berlin had faced initial skepticism from environmental groups and industry observers alike, not only for its unexpected proximity to a major European city but for the high labor costs in Germany, as opposed to another EU state such as Slovakia or the Czech Republic.
German automakers themselves had begun building plants for vehicle assembly and components in a number of neighboring countries over two decades ago, seeking lower labor costs, with Tesla’s Giga Berlin plans challenging industry trends.
“As a high-performing state administration, you have always focused on the technical requirements, the high level of protection of the environment, the protection of the general public, and the neighborhood from dangers and unreasonable nuisances, as well as the legal certainty of the procedure, even under the pressure of great public interest,” said Environment Minister Alex Vogel in announcing the grant of the permit. “In times of climate crisis, the availability of water will play an increasingly important role for future developments and settlements.”
Among other things, the impending start of production at Giga Berlin will allow the automaker’ Shanghai plant to focus on the Chinese market, as Tesla had been shipping cars from China to buyers in Europe. The upcoming start of the Giga Berlin plant will also allow the automaker to deliver a greater number of vehicles to European buyers on much quicker timelines, just as demand for EVs in western Europe has boomed.
Meanwhile, Tesla has pushed back the start of Cybertruck and Roadster production in the U.S. over the past year, while focusing on new plants overseas and more production capacity for the Model 3 and the Model Y. So the automaker clearly knows which side of its bread is buttered.
With the recent start of production in Austin, though far from peak capacity, Tesla has scored two rare victories during a time of unprecedented turmoil in the auto industry, which is still facing supply pressures sparked by the pandemic as well as what could be a longer-term crunch related to energy and raw materials.
Keyword: Tesla Gets Environmental Approval for Giga Berlin