Fire At Tesla’s Berlin Gigafactory Could Be The Last Nail In The Coffin For Musk’s German Expansion Plans


A fire at Tesla’s German plant has prompted area residents to call for a halt to the factory’s operations. The blaze, which thankfully left no injuries, consisted of 800 cubic meters of paper, cardboard, and wood. Although successfully extinguished, it took a reported 50 firefighters to bring under control and gives more ammunition to those opposed to the plant. It’s another black mark for the company’s first European factory, which has been fraught with controversy and roadblocks.

While the facility at Gruenhide in Germany adds much-needed capacity to fulfill soaring demand, getting the German facility running has apparently created so many roadblocks that it appears Tesla may not be considering Germany at all for future new plants.

As reported by Bloomberg, Tesla recently outlined the criteria that will determine how it selects the location for its next plant, and a key point was “As little red tape as possible,” which can be interpreted to be a reference to Germany’s extremely strict regulations and their impact on spooling up the Gruenhide facility.

Related: Musk To face Off Against German Union Over Return-To-Office Ultimatum

Following the plant’s announcement in 2019, the facility ran into months of delays due to legal challenges from environmental groups regarding excessive use of water and threats to local wildlife. After navigating through those issues, Tesla has most recently run into problems with plans to expand the facility by approximately 100 hectares to add more space for parts warehousing and a freight yard, major necessities in the current environment of supply chain bottlenecks. Local authorities in Gruenhide have indefinitely postponed a vote on this plan and have stated that they need clarification from higher authorities.

Late last year, Tesla opted to forego 1.14 Billion Euros ($1.12 Billion) in state aid by opting to produce a new type of battery cell in the Texas facility rather than in Germany, which some analysts feel indicates dissatisfaction with German bureaucracy. The Wall Street Journal also reported earlier this month that the company was pausing plans for battery cell manufacture in Germany and was considering shipping the related equipment to the US.

Elon Musk has previously stated that both the Austin and Gruenhide plants are “Gigantic money furnaces” and that there are still a “host of problems” to work through at both locations, but the company’s recent actions indicate a greater willingness to allocate more in the direction of Texas, which could have negative long term implications for the German facility.


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