Tesla’s Expansion Timeline in Grünheide Remains Uncertain
Tesla, the US electric car maker, is facing growing resistance in Germany this year. The company is sticking to its expansion plans for its only European factory in Grünheide near Berlin. However, due to the difficult market situation, the timeline is completely uncertain. “We are confident that the market will pick up again. It is certainly a question of how quickly and when,” said factory director André Thierig. But he emphasized, “We will not invest billions in expanding the factory without clear signals that there is demand in the market.”
Thierig also mentioned that building another factory would cost billions of euros and stated the condition for doing so. “We can accelerate when we realize that we need to,” said Thierig, who has been working in the automotive industry for almost 25 years. “We are still producing five days a week, three shifts a day, and could ramp up production at any time.”
The electric car market is currently experiencing a downturn. In the first six months of this year, the number of new electric vehicle registrations in Germany was 184,125, with Tesla accounting for 21,249 of them, according to data from the Federal Motor Transport Authority. This is a decrease compared to the same period last year when 220,244 electric vehicles were registered, including 36,384 Teslas.
Tesla, led by tech billionaire Elon Musk, reported a decline in profits for the second consecutive quarter worldwide. The planned job cuts at Tesla also impacted Grünheide. “Our planning at the beginning of the year forecasted much stronger growth, which did not materialize,” said Thierig. “We reduced the 400 jobs quickly and smoothly with an attractive severance package.”
As a positive sign, Thierig mentioned production for the British Isles. “By serving the right-hand drive market in the UK and Ireland from Berlin, we have a larger market to directly access.”
In Grünheide, Tesla has been producing electric cars for over two years. The company plans to ramp up production from over 250,000 cars per year to one million vehicles per year. The first application for environmental approval for expansion has been submitted to the state of Brandenburg but is delayed. The application initially focuses on construction measures on existing buildings, for which the state environmental agency has granted provisional approval. “We expect the first partial approval to come in September or October,” said Thierig.
The start of the year was bumpy, with production halted for about two weeks in January and February due to missing parts from attacks on ships in the Red Sea. Resistance against the US company is growing, with environmental activists camping in the forest near the factory since February to protest against expansion involving deforestation and a new freight station, as well as water consumption.
In March, there was an attack on Tesla’s power supply near the factory, leading to a week-long production halt due to a power outage. In May, environmental activists attempted to storm the Tesla site during protest days. In June, production was halted again, reportedly for internal optimizations. Tesla has introduced more automation, transitioning from forklifts to fully automated processes in the body shop.
Planning is currently underway for a new freight station, which requires deforestation of state-owned forest land. “We are in talks with the forestry department for the purchase,” said Thierig. The Finance Committee of the Brandenburg State Parliament must approve the purchase, and it is uncertain whether this will happen in this term.
Despite concerns from environmentalists and residents, Tesla aims to maintain its current water consumption levels even with expansion. The company plans to recycle process water and sanitary wastewater in the factory to meet water needs for future production. Thierig criticized the protests, stating that Tesla is not an oil refinery but an electric car manufacturer.
The protest camp near the factory is still ongoing, showing the continued opposition to Tesla’s expansion plans in Grünheide.