Tesla's German Gigafactory Almost Ready to Roll

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Tesla's (NYSE:TSLA) first European electric vehicle (EV) plant will start delivering cars by the end of the month following the receipt of a long-awaited permit from the regional German authorities.

The Giga Berlin plant, located at Gruenheide near Berlin, is the company's fourth gigafactory and will have a production capacity of up to 500,000 cars per year when fully commissioned, with the Model Y SUV expected to be the dominant model.

The conditional approval from the Brandenburg state authorities puts an end to months of delays. The plant was originally due to start production last summer, but a combination of environmental protests, the COVID-19 pandemic and supply chain problems brought everything to a halt. "The U.S. car company Tesla today received the final approval notice for the construction of its two factories for the production of electric cars and battery cells from the approval authority, the State Office for the Environment (LfU)," read a statement from Brandenburg's State Chancellery.

Brandenburg state premier Dietmar Woidke said: "The settlement of Tesla is the first major project in Germany that combines climate neutrality with the creation of additional industrial jobs. This settlement leads to worldwide attention - Brandenburg is the rising state. Brandenburg's economy is revolving around climate-neutral value chains added in the field of mobility. This also includes a number of other investments, for example at BASF in Schwarzheide, the production of the electric Mercedes Sprinter in Ludwigsfelde or the planned Rock Tech Lithium plant in Guben. The basis of these investments was and is Brandenburg's leading position in the expansion of renewable energies."

Giga Berlin is located on a 300-hectare site in Gruenheide, southeast of Berlin. It will eventually employ more than 12,000 people, up from 2,200 at present. The company claimed that it will be the first location in Europe to manufacture battery cells in-house together with electric vehicles. The battery cell production plant will have an annual production capacity of up to 100 gigawatt-hours (GWh) to start, enough to produce batteries for more than 1 million Model Y cars. The plant may be expanded to 200 GWh.

Commenting on the importance of Giga Berlin to Tesla, Wedbush analyst Dan Ives wrote: "The red tape and headaches seen around the delays/disputes opening up this flagship European factory has been frustrating for investors to watch unfold as many on the Street were doubting if Giga Berlin ever actually would open. We cannot stress the production importance of Giga Berlin to the overall success of Tesla's footprint in Europe and globally, as the current Rubik's Cube logistics of producing cars in China at Giga Shanghai and delivering to customers throughout Europe was not a sustainable trend. The Berlin factory establishes a major beachhead for Tesla in Europe with potential to expand this factory to production of 500,000 vehicles annually with Model Y front and centre over the coming 12 to 18 months."

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