Tesla’s new Berlin assembly plant has begun building prototypes of the Model Y battery-electric vehicle and the company expects to receive the official greenlight to begin producing sellable products within the next few days, according to reports from Europe.
The project has repeatedly been delayed, Tesla CEO Elon Musk repeatedly railing against what he has called red tape. And that has led the EV manufacturer to reject proposed funding of $1.5 billion for Giga Berlin, money that would have helped support battery production at the facility.
“Tesla probably cannot meet a (key) condition for funding the battery factory,” according to a Monday report by German trade publication Automobilwoche.
Red tape and other headaches
The automaker has not provided a reason for rejecting the EU grant, according to government officials, but there has been widespread speculation. The funding requires, among other things, that it be used for “the first industrial deployment” of a new technology. But while Tesla has been working to bring an entirely new type of battery to market, Giga Berlin is going to continue producing the same lithium-ion batteries already being made at the original Gigafactory in Nevada.
Giga Berlin has turned into a major headache for Tesla — which recently moved its official corporate headquarters to Texas after a quarrel between CEO Musk and the State of California.
When the factory was first announced, Tesla set a goal of getting it into production by July 2021. Construction was repeatedly set back due to environmental and other concerns. The facility appeared ready to go by October but faced additional red tape setting production back again. In October, environmental groups won an extension of the public comment period which has now expired.
Production could begin within days
Automobilwoche expects German regulators will finally give the go-ahead to Tesla within a matter of days. It also said the automaker has already begun rolling out “validation units” to prepare for its formal production launch.
Once approved, the factory is expected to take a month or more to work out any bugs. But Tesla has indicated it likely will produce no more than about 30,000 Model Y SUVs through the middle of 2022. The carmaker desperately hopes to avoid what Musk described as the “production hell” that accompanied the launch of the Model 3 sedan at the carmaker’s original plant in Fremont, California.
Still, Tesla needs the capacity at Giga Berlin to come online as quickly as possible. Reliant on imports from plants in the U.S. and China, it has watched as competitors such as Volkswagen have taken advantage of rapidly increasing consumer demand for BEVs in the EU.
Losing market share
Diverting vehicles to Europe has set Tesla back in both the China and the U.S. In both markets, it has faced increasing competition. The Ford Mustang Mach-E is now the fourth best-selling BEV in the States and, along with the Volkswagen ID.4 and Chevrolet Bolt, is gaining market share rapidly. The Tesla Model Y and Model 3 occupy the top two sales spots.
Tesla’s factory building spree isn’t over yet. It is already putting in place a fourth assembly plant in Texas that is expected to begin production by late this year or early in 2022.
Merkel and her Gestapo bureaucrats trying to protect the German OEMs.