Tesla’s European Ambitions Stall: German Gigafactory Expansion On Hold

Things have been pretty mediocre for Tesla in Germany this year: protests, production stoppages, problems in the market. And now the expansion of the electric car plant in Grünheide, Brandenburg, is stalled and even on hold for the time being.

The company maintains expansion plans for its only European plant. But because of the difficult market situation, the program is wide open. “We firmly believe that the market will recover. It is definitely a question of how fast and when,” said plant manager André Thierig.

But he stressed, “We are not going to spend several billion to expand the factory without there being very clear signals that the market is also asking for it.”

Tesla’s plant manager not only clarified that building another factory would cost several billion but also indicated the conditions. “We can press the accelerator when we feel we need to,” said Thierig, who has worked in the automotive industry for nearly 25 years. “We still produce three shifts five days a week and could start again at any time.” So the factory has no particular need to be expanded, at least for now.

Significantly fewer new electric cars registered

The electric car market is in crisis. In the first six months of this year, the number of new electric car registrations in Germany was 184,125, including 21,249 Teslas, according to data from the Federal Motor Transport Authority. Things were better during the same period last year: then 220,244 electric vehicles were registered, including 36,384 Teslas.

The company, led by tech billionaire Elon Musk, ended its second consecutive quarter with a drop in worldwide profits. Previously planned job cuts at Tesla also took a toll on Grünheide. “Our planning at the beginning of the year called for significantly stronger growth, which did not materialize,” Thierig said. “We cut the 400 jobs fairly quickly and quietly with an attractive severance package.”

According to him, production for the British Isles is a positive sign. “Since we now also serve the right-hand-drive market in Britain and Ireland from Berlin, we have a larger sales market that we can access directly.”

Application for approval for phased expansion

Tesla has been producing electric cars in Grünheide for more than two years. Nearly 12,000 employees work there, according to the company. The automaker wants to increase production from more than 250,000 cars a year to one million vehicles a year.

The first application for environmental approval from the state of Brandenburg for the expansion has been submitted but has been delayed. Initially, it is only the construction work on the existing buildings for which the state environmental agency has granted provisional approval. ”

But Bradeburg does not like the Tesla factory, and there have been multiple instances of sabotage, including power outages that affected production.