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German factory is key to Tesla's EV expansion plan in Europe

Uwe Hessler
March 5, 2024

Tesla's factory in Germany has played a pivotal role in the electric car maker's expansion strategy. Yet it faces challenges that reflect the complex interplay between industrial progress and environmental concerns.

A picture of the entrance of the Grünheide factory with a parking lot in front of it
Tesla's Grünheide factory is under fire from local residents, environmentalists and anti-capitalist protestersImage: Patrick Pleul/dpa/picture alliance

Elon Musk, Tesla's visionary CEO, has long emphasized the significance of the Grünheide Gigafactory in advancing the company's mission. Musk declared during the factory's opening in 2022 that the new Gigafactory would be "crucial for accelerating the production of affordable electric vehicles, bringing us closer to our goal of making sustainable transportation accessible to all."

The facility, strategically located just 30 kilometers (18.6 miles) from Berlin, currently employs over 12,500 workers and has been instrumental in Tesla's efforts to meet the growing demand for electric vehicles in the European market.

With a production capacity aiming for 500,000 cars annually, Musk envisions the Grünheide Gigafactory playing a critical role in achieving Tesla's ambitious global targets.

Expansion plans and regional challenges

Musk, known for his risk-taking approach, initiated construction even before obtaining all necessary approvals from the local authorities. He affirmed this bold move: "We took a calculated risk to kick off construction while awaiting final permits from the Brandenburg government."

However, the road to expansion continues to be fraught with challenges. Tesla's proposal to expand the factory, including constructing a freight station, warehouses, and a company kindergarten, has encountered resistance from environmental activists and local residents.

The region's environmental concerns are palpable, with protests intensifying since late February.

How new Gigafactories are staining Tesla's brand

Activists have occupied part of the forest earmarked for expansion, erecting treehouses and vowing to remain for an extended period. Local opposition, fueled by worries about deforestation and water protection, poses a formidable challenge to Tesla's plans.

In an unexpected twist, Tesla's factory now faces a major setback as a power outage, attributed to a left-wing extremist group, has brought production to a standstill.

Tree houses hang in a forest in Grünheide near Berlin. A sign hangs in front that says "Water is a human right."
Water scarcity in the Brandenburg region has led to questions about Tesla's huge consumption of groundwaterImage: Cevin Dettlaff/dpa-Zentralbild/dpa/picture alliance

Battery plans in doubt

Tesla initially aimed to make Grünheide the site for producing all components of the batteries used in its Teslas, with Elon Musk touting it as the world's largest battery factory.

However, recent developments indicate a shift in strategy, as larger battery production capacities are planned in the United States, capitalizing on significant government subsidies.

As Tesla grapples with the recent power outage and strives to resume production, the Grünheide Gigafactory remains at the center of a broader German discourse on sustainable industrial development and the delicate balance between economic progress and environmental stewardship.

Edited by: Davis VanOpdorp