Tesla Plans German Factory Expansion

Production at the new Tesla factory in Grünheide, Germany near Berlin has barely gotten started and already Tesla is making plans to expand the facility. Quoting local broadcaster RBB, electrive Tesla says wants to buy about 100 hectares of land to the east of the current site to be used for additional storage space and a goods station.

Apparently, in an age when things like chip shortages and warfare in Ukraine are highlighting the pitfalls associated with “just in time” manufacturing, Tesla wants to have more of the components it needs to build its cars onsite. Warehousing is expensive. The “just in time” model, which first came to prominence in Japan, shifts many of those costs to suppliers. But if there are no parts to supply, the model breaks down and production grinds to a halt.

RBB says the site in question is located between the RE1 railway line and the L23 and L38 country roads. A large part of the land belongs to the state of Brandenburg and would be suitable for sale. Edis, the local utility company, built a transformer station on six hectares in 2021 to supply the Tesla factory. The purchase price for the new parcel of land has not been announced, but RBB says, “If the state authorities demand the same price per square meter as for the first 300 hectares, Tesla would have to pay around 13 million euros for the additional area .”

Hurdles Ahead For Tesla

The state government may be happy to do another deal with Tesla — the new factory is boosting economic activity in an area where previously there was very little — but the same local concerns that bedeviled Tesla when it started to develop the primary site for its German factory will present hurdles to the new parcel as well.

As with the current site, the new area is overgrown with pine trees. Environmental groups were unhappy that Tesla cut down a lot of trees on the existing property it owns, even though it promised to plant many more elsewhere. The Grünheide municipal council would also need to change the development plan for the area, a process that could begin as early as June of this year.

Finally, the Strausberg–Erkner water board would have to approve the project. Like the current site, the 100 hectares are also located in a water protection area. The amount of water needed to operate the new factory already caused conternation among local residents, and the new expansion plan will reinvigorate many of the same concerns.

Tesla previously announced that it wants to receive as many components and supplier products as possible by rail and ship, and move most of the vehicles manufactured at the Grūnhiede factory to market by rail as well. Access to the German rail system was therefore one of the prime considerations in determining where to build Tesla’s first factory in Europe. The new expansion plan apparently will facilitate the linkage Tesla wants with the German rail system.

Local opposition to any expansion of Tesla’s operations will draw out the usual suspects, who will hoot and holler about trees, water, and other concerns, but the result is already predetermined. Germany needs to get off fossil fuels faster than ever, thanks to the international kleptomaniac in the Kremlin. It needs Tesla to build electric cars for its citizens. You can say the fix is ​​in, but come what may, Tesla will get what Tesla wants — eventually.


 


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