Tesla’s European Factory Construction Halted Following Environmental Concerns

Over the past several days, Tesla’s value soared to an astronomical $611 billion market cap for the first time, situating the electric car manufacturer into the exclusive club of the top-five S&P 500 companies. Although the stunning market cap milestone was largely fuelled by nothing more than excessive speculation about the company’s future endeavours, Elon Musk will now proudly join Apple, Microsoft, Amazon, and Facebook, after just recently crowding out Bill Gates for the title of the world’s second richest billionaire.

In other, less exuberant news however, it appears that Tesla’s first European factory in Brandenburg, Germany has run into some roadblocks. According to German newspaper Tagesspiegel, a local court has ordered Musk to cease clearing the pine forests where his Gigafactory is to be located, after an environmental authority expressed concerns over the activity harming lizards and snakes that hibernate in the area.

Before further forest clearing can occur, Musk must prove that the construction will not cause harm to the critters – something that will likely take time and delay the billionaire’s plans for producing electric cars in Germany by July 2021.

Despite Tesla priding itself with manufacturing zero-emission vehicles for a climate-conscious consumer, the company has displayed behaviour that is a far cry from being environmentally friendly. Prior to the most recent German court order, environmental groups in Germany had forced Tesla to reduce its water consumption at its new plant by more than a third, meanwhile back in 2018, a whistleblower revealed that nearly 40% of materials used in the production of driving units and batteries either need to be reworked or scrapped.

However, further delays in Europe could prove to be disastrous for Tesla, especially since other, more prominent car manufacturers including Audi and Volkswagen AG have already begun selling electric vehicles that directly compete with Tesla’s most popular models. Unlike Tesla’s assembly plant in Shanghai, which was completed in under one year, the company is expected to face tougher scrutiny in Germany – to the dismay of Musk.

Although Tesla has garnished significant political support in Europe, Musk will likely face more pushback from environmentalists regarding the factory’s water consumption and ecological impact in Brandenburg. in addition, Tesla faces numerous demands from the German auto workers’ labor union, which is 2.3 million members strong and will likely clash with the billionaire’s unfriendly view of organized labour.


Information for this briefing was found via Tagesspiegel. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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