Tesla Granted Conditional Permit That Paves the Way to Start EV Production at its New $5.5 Billion Gigafactory in Germany

resource from: Reuters   

Tesla's Berlin-Brandenburg Gigafactory was granted a conditional building permit that paves the way for it to become fully operational.

Electric vehicle leader Tesla will soon begin building its electric vehicles in Europe for the first time. The company was given a conditional building permit by authorities in Germany that greenlights the start of production. 

However, the conditional building permit does not allow Tesla to start production right away. The company must first prove that it meets various conditions, including in water use and air pollution control. Once Tesla does so, the automaker will receive its long-awaited permit to begin building electric vehicles. 

Tesla plans to show that it meets the imposed conditions within two weeks, Brandenburg's environment minister Axel Vogel said on Friday. 

Brandenburg state premier Dietmar Woidke said at a news briefing that Tesla's conditional permit marks "a big step into the future", adding that the factory would be a major industrial and technological driver for Germany and the region.

The factory is located near the small community of Gruenheide and is officially named the "Tesla Berlin-Brandenburg Gigafactory" after the municipality it's located in.

Tesla's factory in Germany is its first European production facility and will build electric vehicles for the EU market. Once fully operational, the factory will produce up to 500,000 vehicles a year, according to Tesla. When it first opens, the plant will build the Model Y.

Production in Europe will help Tesla deliver the Model Y cars to customers faster and more cheaply. In the interim, Tesla has been shipping the Model Y to Europe from its factory in Shanghai as its awaits approval to begin production in Germany. 

Tesla faced months of delays in getting final approval to start production at the new factory, including environmental concerns. Among the environmental concerns was the factory's impact on the environment, as part of the facility is located in a drinking water protection zone. The factory itself borders a wooded nature preserve. 

During a visit to Germany in May 2021, Tesla Chief Executive Elon Musk blamed government bureaucracy for the delays in completing construction. As a result, he pushed back the planned opening for the factory to Oct 2021. Musk originally wanted the plant up and running by July 1, 2021.

Despite the delays and concerns of environmental regulators, Tesla's German gigafactory is for the most part, welcome in the region.

"We've gotten a lot of support and that's very much appreciated," said Musk in August of last year. "We feel very welcome and we're very happy to be here in Deutschland."

The factory will eventually employ around 12,000 workers. Roughly 2,600 have been hired so far, unions said last month, and Tesla is in talks with numerous suppliers in the region to source as much as possible locally, which can help reduce wait times and costs, while helping to boost the local economy.

In addition to the new German gigafactory, Tesla builds electric vehicles at its plant in Fremont, California and in Shanghai. The Shanghai plant produces Model 3 sedan and more recently, the Model Y SUV for the China and European markets. Tesla was granted approval from officials in China to start building the Model Y crossover in Nov. 2020.

Tesla is also in the process of building a fourth factory outside of Austin, Texas. The plant will produce Tesla's futuristic Cybertruck. However the Cybertruck, as well as the redesigned Roadster, have been delayed until at least 2023 as Tesla focuses on ramping up production of the Model Y to meet growing demand.

Tesla's expansion to Europe will put the company in direct competition with German automaker Volkswagen AG, which is the country's current electric vehicle leader. Volkswagen is Germany's largest automaker and has a 25% share of local electric vehicle sales compared to Tesla's 13% share.

However, Volkswagen is not standing by and allowing a competitor like Tesla to move into its own backyard without a challenge. 

Volkswagen said on Friday it would spend about 2 billion euros on a new factory near its Wolfsburg headquarters to make the Trinity sedan, the first of a new generation of electric vehicles for the German carmaker that's due to hit the market by 2026. Construction of the new factory is set to begin next year.

resource from: Reuters

FutureCar Staff