Tesla Delays Gigafactory Berlin Opening to 2022

The opening of Tesla’s Gigafactory Berlin has been pushed back until 2022 due to delays in regulatory approval and battery production equipment. Tesla had intended to have the factory open by the end of 2021. Now it is more likely to open in late January of next year.

Gigafactory Berlin has faced issues that included the temporary disconnection of its water supply due to an unpaid bill, which may have been a factor in its decision to replace the factory manager with a former Mercedes-Benz manager. The move reportedly annoyed a German automakers’ union, likely due to Tesla’s reputation for being anti-union.

More recently, a German court ruled in favor of environmental groups who issued a legal challenge alleging that Tesla failed to take appropriate measures to mitigate the environmental impact of Gigafactory Berlin’s construction. At issue was an endangered snake species that would need to be moved to a new area to get them out of the way. Environmental activists and Berlin area residents have also expressed concern about water usage at Tesla’s factories despite Elon Musk’s announcement of a more efficient battery making process that uses less water at last year’s Battery Day.

Tesla has complained about bureaucratic slowdowns in the regulatory approval process. The environmental challenge may be causing a large part of the holdup due to the increased scrutiny of the Gigafactory’s footprint. In communications with government officials, the company questioned the German government’s commitment to combatting climate change:

“The German approval framework for industrial and infrastructure projects as well as spatial planning directly contradicts the urgency to plan and realize such projects that is necessary to battle climate change.”

Tesla has also recently applied to add a battery manufacturing facility to the original plans, which could slow down the final approval process.

Because Tesla’s vehicles do not burn gasoline, it exceeds vehicle emissions standards to the point where it made $1.58 billion from the sale of carbon credits last year. Most recently, Volkswagen signed a deal to buy carbon credits from Gigafactory Shanghai. On the flip side, the U.S. and Germany have accused Tesla of misrepresenting the impact of some manufacturing processes such as the application of paint to its vehicles.

Once Gigafactory Berlin is finally opened, the company plans to manufacture up to 500,000 cars per year at that factory. Currently, many Tesla vehicles sold in Europe are made at Gigafactory Shanghai, which has faced its own trials such as a news outlet’s claim that the Chinese factory uses “sweatshop” practices. A libel case related to these allegations is still ongoing.

While regulatory standards are not necessarily a bad thing, Tesla may not be entirely unwarranted in being annoyed by the bureaucratic slowdown in approving Gigafactory Berlin. The construction of core factory facilities is close to completion despite the hurdles. Elon Musk has stated that he would very much like to make gasoline-burning vehicles obsolete in the same way that motor vehicles made the horse and buggy obsolete and some charging stations like a recently built station with 20 Superchargers in Düsseldorf, Germany can run completely on renewable energy, including the installation of a solar roof and wind turbines.

Tesla had originally planned to have a “grand opening” for Gigafactory Berlin on July 1 and might have actually managed it if it wasn’t for regulatory bureaucratic slowdowns that have now pushed the factory opening to late January 2022.