Elon Musk’s Tesla factory delayed by bureaucracy and unexploded bombs

Elon Musk’s huge Tesla factory in Germany is facing huge construction delays due to government red tape, environmental activists and unexploded WW2 bombs, meaning its first cars might not be produced until next year.

The $4.9billion Gruenheide gigafactory site 24 miles east of Berlin was scheduled to open on July 1 this year before it was delayed until late 2021 last month.

Now the date could be pushed back to next year due to a series of unforeseen roadblocks.

The billionaire CEO announced the new car plant in November 2019 just as his Shanghai gigafactory was due to start making Model 3s only 11 months after its construction started.

He considered opening a European base in the UK but decided the Brexit situation was too unstable, so he decided to set up camp in Germany.

But his optimism has so far been unrewarded as he is still waiting for environmental approval from the state of Brandenburg, despite tweeting in July last year: ‘Giga Berlin will come together at an impossible-seeming speed.’

Tesla has been forced to remove bomb shells from the construction site, silence activists opposed to the chopping down of trees, its water use and the removal of bat and animal habitats, and fight potential labour law violations.

Physical construction of the site, which Musk visited this week after a brief stop in London on his £50million private jet, is nearly completed but there still remains a host of legal issues which need to be resolved before it can start producing the electric cars.

During his visit, he said about the opening: ‘It’s hard to predict with precision cause you can only make the cars when all of the pieces are here.’

As he spoke to reporters, he slammed the red tape which is holding up his business expansion.

Home to traditional carmaking rivals Volkswagen, Daimler and BMW, Germany is also known for its complex regulation and bureaucracy.

The tech entrepreneur said:  ‘I think there could be less bureaucracy, that would be better.

‘There should be some kind of active process for removal of rules. Otherwise, over time, the rules will just accumulate and you get more and more rules until eventually you can’t do anything.’

Tesla is the world’s most valuable carmaker but produces only a fraction of the cars of his rivals, making 500,000 vehicles last year compared to 9.3million by Volkswagen.

Musk wants to produce a million electric cars a year but without the Berlin site, this could prove a long way off.

Garrett Nelson, senior equity analyst at CFRA Research, told Forbes: ‘Coming off the incredibly fast build of the Shanghai factory, they might have miscalculated how quickly they could get Berlin up and running–perhaps not fully accounting for the significant differences in regulatory and environmental standards.

‘Tesla is doing everything possible to stay on track with its guidance, but the reality is that first production could be delayed until early 2022.’

The company has not confirmed that Musk is seeking a six-month delay to production and recently assured investors that the site was ‘progressing well’.

Locals and politicians were delighted when Gruenheide was picked as his European site, bringing jobs and prestige to an area in former East Germany.

But others are campaigning against the factory due to its location between a highway and a railway station that is only a few miles from a protected nature reserve which has been registered as a fauna and flora habitat area since 1998.

Considering the electric car company’s green ambitions, some were upset when construction started by chopping down 430 acres of forest.

Environmentalists tried to block the tree-cutting in early 202 but Tesla eventually won court approval to initially remove 92 hectares of trees, then a later ruling allowed him 83 more.

Tesla has since pledged to plant three times as many trees as it fells.

Activists also protested the damage construction would cause to forest animals, forcing Tesla to relocate bats and ants, as well as seven unexploded bombs.

Adding to the company’s problems, the local water authority discovered pipes had been installed without permission, causing another holdup and a potential fine.

The State Office for Occupational Safety and other agencies are also investigating Tesla over potential labour law infringements.

They will allegedly look into whether the company violated rules over minimum wages, working hours, conditions and housing during the construction.

The factory will not be able to begin producing cars until every permit has been secured.

Germany’s biggest labour union IG Metall, which has 2.2million members, represents workers at Tesla and initially welcomed the plans.

ButMusk is anti-union, has often tweeted against them, and even tried to keep the United Auto Workers away from his Fremont factory in the US.

IG Metall say they are waiting to see whether workers in Germany will follow the same protocols in the US and Chinese plants, with three shift patterns for round-the-clock work.

The union also says it will observe whether Tesla follows German wage and working condition rules.

Christiane Schroeder, managing director at the Brandenburg branch of NABU (Nature and Biodiversity Conservation Union), is a leading opponent of the Berlin site.

NABU is one of the oldest and largest environmental non-profits in Germany but she says despite raising issues with Tesla, they have only taken on board some of her concerns.

She said: ‘I think Elon Musk is more into his own business and into new technology than really in preventing climate change.

‘He sees a great opportunity to sell his inventions as “part of the solution” but doesn’t realise that he creates new problems as a side effect.’