Why the Tesla plant in Berlin missed its July 1 opening date

• Tesla’s new factory outside of Berlin, Germany, was scheduled to open on July 1.
• Permit issues and environmental activists have delayed the plant’s opening.
• Tesla plans to produce 500,000 cars at the plant, which is essential to its European strategy.
• See more stories on the Insider business page.

“Deutschland rocks”, Elon Musk told reporters during a visit in September 2020 to the construction site of Tesla’s first European automobile plant. Almost a year later, Gigafactory Berlin’s scheduled opening date for July 1 has passed, and it is not yet known when it will open.

Since work began on the sprawling factory in early 2020, Tesla has faced setbacks on issues such as environmental impact and permits. All of this means that Tesla has fallen far behind in opening the plant, the cornerstone of its European strategy where it plans to produce half a million cars per year.

As mainstream automakers like Volkswagen, BMW and Mercedes-Benz double their efforts on electric cars and blow Tesla’s neck, the company probably wants to avoid further stumbling blocks. But we still don’t know when the factory will open.

Elon Musk against the German bureaucracy

Tesla has experienced one bureaucratic slowdown after another since leading the way in the small town of Grünheide, near Berlin.

In December, Tesla was forced to temporarily halt construction of parts of the plant after failing to pay a $ 100 million bond on time. In June, it took resubmit permit applications to take into account a battery production installation. The public now has until Aug. 16 to review the documents and file objections, according to the Brandenburg State Office for the Environment.

All the while, Tesla has been building the plant under a series of provisional permits – at its own financial risk – pending full approval from the Brandenburg environmental authority. Theoretically, the plant would have to be dismantled if the project doesn’t get the green light, and it’s unclear when Tesla will get full clearance.

Tesla is fed up with the delays. In April, the company sent a letter to the Brandenburg state government complaining about the “irritating” approval process that had started 16 months earlier, Bloomberg reported.

The issues haven’t gone unnoticed for Musk either.

“I think there could be less bureaucracy, that would be better”, The CEO told reporters on the Grünheide site in May.

A battle of lizards

Tesla has also encountered stiff opposition from environmental groups who are concerned about the impact of the gigantic plant on local wildlife and the water supply. Activists staged protests and went through the courts to make their voices heard.

In February 2020, as Tesla prepared the site for construction, a German court ruled that the company must temporarily stop cutting trees while it examines the Green League’s objections. Courts asked Tesla to halt deforestation efforts again in December after activists complained the construction was disrupting habitats for hibernating snakes and lizards.

Environmentalists are also concerned about the station’s effect on the local water supply since part of it is located in a drinking water protection zone. Tesla has lowered its water needs.

A delayed opening

While Tesla’s stock price makes it the most valuable automaker on the planet, it hasn’t earned that title by selling the most cars. Far from there.

The company moved a record 500,000 vehicles in 2020. Some of the world’s largest automakers sell as many as a single model. Increasing production volumes and increasing sales are crucial to Tesla’s future profitability, especially as traditional manufacturers and startups begin to flood the market with new electric vehicles.

So when will the Gigafactory Berlin be operational?

In April, Musk said Tesla could start limited production at the plant by the end of the year. But, as Musk himself admits, he’s not the best at predictions.