Tesla (TSLA) – Take the report from Tesla Inc and CEO Elon Musk are officially very close to starting car production at the Berlin-based European factory.
After months of uncertainty, a key German regulator has approved a request from the Austin-based electric car maker, according to the German business newspaper Handelsblatt.
Tesla has been waiting for several months for permission from the German authorities to start production of vehicles in this giant factory, which will serve mainly the European market.
The company won final approval from the state environmental service in Brandenburg. Brandenburg Prime Minister Dietmar Voidke will comment on details of the decision to approve a press conference in Potsdam on Friday, Handelsblatt reported.
Tesla is not alone in expanding abroad
This news comes as Lucid Group (LCID) – Get Lucid Group, Inc. Report, one of Tesla’s main competitors, has just announced an agreement with Saudi Arabia to begin construction of its first international factory in the Kingdom in the current first half of the year. The company expects to produce up to 150,000 cars a year at the facility.
Lucid and its luxury electric sedans are considered one of Tesla’s most serious rivals. There is no doubt that with the support of Saudi Arabia, which is also a shareholder, the manufacturer in Newark, California, has the financial means to pursue its ambitions.
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Tesla, which disbanded its communications department last year, did not immediately respond to a request for comment from TheStreet.
The State Department of the Environment recently said Tesla would have to meet additional requirements and provide evidence before the plan could take effect, according to the newspaper, which did not provide further details.
Early action is possible if nothing fundamentally speaks against the project and the investor implements it at his own risk.
Objections to the environment and drought
Construction of the gigafactory began two years ago in Grünheide, about an hour southeast of Berlin. Musk had hoped to begin production on July 1 last year, but the approval process dragged on, in part because Tesla expanded its initial plans to include a battery factory. This led to additional hearings.
Until the beginning of February, the timing of the final approval from the state of Brandenburg was still unclear, as conservationists were still objecting, as Tony Owusu of The Street wrote.
Due to prolonged droughts in East Germany – even while there have been floods in the west – Berlin may miss the good old days of excess groundwater, environmentalists say.
Tesla was warned of this dynamic, but when Musk was asked last year if the construction of his factory in Brandenburg would deplete the area’s water supply, he burst out laughing, calling the idea completely wrong.
But with this approval, the last hurdle has already been removed.
Tesla plans to build a Model Y SUV on schedule. Its goal is to produce up to 10,000 cars a week.
The company’s plan to take over part of the European electric vehicle market rests on the shoulders of the Brandenburg plant, and Tesla is spending $ 5.7 billion to increase production.
If the plant reaches its full capacity, the 500,000 cars it will produce annually will double Germany’s electric car production in 2020.
Wall Street analysts have set their high targets for stock prices in part on the success of Tesla’s expansion in Germany.
Credit Suisse last month raised its share price target to $ 1,025 from $ 830 based on optimism about Brandenburg, with analyst Dan Levy writing that the plant “could serve as the most critical source of capacity for Tesla.”
Levy called the German market “the zero place for the global movement of electric cars.”
Tesla produced 930,422 cars in 2021.