© Reuters. Workers prepare scaffolding at the construction site of Tesla’s electric car factory in Gruenheide, near Berlin, Germany, on March 4, 2022. REUTERS/Annegret Hilse
Nadine Schimroszik and Christoph Steitz
Potsdam, Germany (Reuters) – Tesla won conditional approval on Friday at its German Gigafactory near Berlin, the state of Brandenburg said, ending the 5 billion euro ($5.5 billion) landmark project. Months of delays in factories.
The Gigafactory, key to Tesla (NASDAQ: ) CEO Elon Musk’s ambitions to conquer European market leader Volkswagen (DE: ), was originally supposed to open last summer.
Germany’s largest automaker has the upper hand in Europe, with a 25% share of electric vehicle (EV) sales compared with 13% for Tesla.
Brandenburg governor Dietmar Wardeck told a news conference that the development marked a “big step into the future”, adding that the Tesla factory would be a major hub in Germany and the region. Industrial and technological drivers.
About 2,600 of the 12,000 workers expected at the plant have been hired so far, and Tesla is in talks with numerous parts suppliers in the region to source as much locally as possible, the union said last month. , thereby reducing waiting time and costs.
Underlining the tough competition facing Tesla, Volkswagen said on Friday it will spend about 2 billion euros to build the Trinity, the German automaker’s first new model, at a new plant near its Wolfsburg headquarters. A generation of electric vehicles, and construction will begin next year.
Tesla’s 536-page conditional building permit on Friday doesn’t mean the U.S. electric car pioneer can begin production immediately. It must first demonstrate that it meets a number of conditions, including water and air pollution control.
Only then will Tesla get its long-awaited license to operate and actually start producing 500,000 battery-powered cars a year at its new factory in the small community of Glenhead.
Starting production in Germany means Tesla can deliver its Model Y vehicles to European customers faster and cheaper, as it has filled European orders at its Shanghai plant in recent months as it awaits approval from the plant.
Brandenburg state environment minister Axel Vogel said Tesla plans to demonstrate compliance within the next two weeks, while it can raise objections next month.
Tesla’s next challenge will be to scale up production as quickly as possible, which Musk said at a live show in October would take longer than building a factory.
Local environmental groups have long been concerned about the plant’s negative impact on local habitats.
Numerous public consultations largely focused on this front have delayed the process, and Musk has expressed anger at German bureaucracy on several occasions.
Tesla has begun construction of the plant under pre-approved permits and will also include a battery plant capable of generating more than 50 gigawatt hours (GWh) of electricity annually, more than European rivals.
Musk said on-site production of car batteries will initially come from China, but he intends to have mass production at a German battery factory by the end of next year.
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