Scientists say the factory Elon Musk is building in Germany under the leadership of Tesla would exacerbate the local climate change crisis.
The climate change crisis has created a huge problem for Elon Musk who led Tesla in Germany and his lighthearted attitude didn’t help at all. When Elon Musk was asked last year if the factory that Tesla Inc. was building in Germany, the area’s water supply would run out, he burst out laughing, calling the term “all wrong.” Six months later, water is one of the main reasons why the plant is still not producing vehicles. While Musk candidly pointed to water “everywhere” around Berlin in August, the region is suffering from declining groundwater levels and prolonged droughts due to climate change. That has led to a legal challenge set to go to court next week and an admission from local authorities that deliveries won’t be enough once Tesla ramps up the factory. The issue has the potential to further delay or even halt the 5 billion euro ($5.7 billion) project, which could prove a costly setback to the automaker’s expansion.
“Tesla will certainly exacerbate the problem,” said Irina Engelhardt, head of the hydrogeology department at the Technical University of Berlin. “There may not be enough water for everyone.”
Stepping up the factory in the eastern state of Brandenburg is key to Tesla’s global ambitions. The automaker needs a manufacturing base in Europe to cater for the region’s fast-growing electric vehicle market, which is expected to remain much larger and more competitive than the US for years to come. While Tesla has been building the factory at breakneck speed, it is still awaiting final approval from local authorities, just as Volkswagen AG, Mercedes-Benz AG and Stellantis NV are expanding their own EV ranges.
“The current water supply is sufficient for the first phase of the plant,” Brandenburg Economy Minister Joerg Steinbach said in an interview. Once Tesla expands the site, “we’ll need more.”
Musk, 50, is on a charm offensive to promote the factory that Tesla has said will eventually produce batteries and as many as 500,000 cars a year. He tweeted in German, interacted with local politicians and threw an Oktoberfest-style funfair on the construction site in October. But he also frustrated authorities with some last-minute changes to the factory and sparked outrage in Germany last week for posting a meme evoking Adolf Hitler. The country’s vehicle regulator said this week it is investigating one of Tesla’s driver assistance features.
Much of the optimism about Tesla’s growth prospects this year rests on the company’s ability to get the factories it has built near Berlin and Austin, Texas, operational. When Credit Suisse analysts raised their $1025 price target from $830 last month, capacity expansion was the first factor mentioned. The Berlin plant “serves arguably as Tesla’s most critical incremental source of capacity,” analysts led by Dan Levy wrote in the Jan. 18 report. Stepping it up should bolster the offering in a market that has been “ground zero for global EV bending.”
German politicians have supported the investment because it promises thousands of new jobs in a region with little heavy industry. Still, progress at the small town of Gruenheide site has been slower than hoped, with the pandemic, bureaucracy and local resistance over water use delaying production start by several months.
The Nabu and Gruene Liga groups sued the Brandenburg environmental agency last year for failing to consider the effects of climate change when approving a 30-year permit to pump more groundwater for Tesla’s plant. Authorities say the problem is manageable and they are already looking for additional supplies. A decision in favor of the environmentalists would likely delay and even derail the opening of the plant altogether. A first court hearing is scheduled for March 4.
The Tesla and Brandenburg Department of the Environment, which oversees the office, did not respond to requests for comment.
Experts say some of the environmentalists’ concerns are justified. The Brandenburg groundwater level has been declining for the past three decades. Droughts in each of the past four years have led to wildfires and crop failures. Meteorologists are more likely to predict heat waves, further weakening the local soil’s ability to store rain.
According to Axel Bronstert, a professor of hydrology at the University of Potsdam, Tesla’s factory would roughly double the amount of water consumed in the Gruenheide area. He said it is “naive” to think reserves would be sufficient for both the plant and residents, calling the groundwater situation in Brandenburg “serious”.
Regardless of how judges decide the case, local water companies will have to invest in new infrastructure, including a wastewater treatment plant to ensure adequate supplies – major engineering projects that authorities admit could take years.
“There are significant delays in processing the necessary measures,” Andre Baehler, the head of the local WSE waterworks, said at a hearing of the Brandenburg parliamentary environment committee earlier this month.
Tesla noted in its impact report last year that water is becoming increasingly scarce due to climate change. The company said it extracts less water per vehicle produced than most established automakers, and is taking steps at the German plant to further reduce its use.
Under a contract with local authorities, the Gruenheide site would receive 1.4 million cubic meters of water annually – enough for a city of about 40,000 inhabitants. Steinbach said that while he takes environmental concerns very seriously, the vast majority of locals support the plant. Brandenburg authorities are supporting efforts to drill for more water in the area, and supplies could also be sourced from further afield if needed, he said.
But digging new wells probably won’t go away. Manuela Hoyer, who lives just a few miles from the factory, says Tesla will receive preferential treatment from local politicians, even if it would exacerbate an already serious environmental problem.
“We’ve been told for years not to water our lawns,” Hoyer, who is active in a citizens’ initiative monitoring the project, said in an interview. “Then the world’s richest man comes along and gets everything he wants.”