Gigafactory Berlin Update
Tesla’s GigaFactory in Berlin is set to become the most advanced vehicle manufacturing facility in the world. But historic accomplishments like this don’t come easy, and Tesla has had their fair share of obstacles to overcome with the construction of this factory. The production line that we had expected to be fired up this month has been put on an indefinite delay. Hopefully operational by the end of this year, though it could go into 2022. But it’s not all bad news, there have been just as many wins to celebrate as there have been setbacks. So in today’s video we’re going to work out just what is going on with Tesla’s Berlin factory right now in July 2021, and we’ll take a look at where they are heading in the coming months and years.
The Risk
OK, let’s set the stage for this video by first acknowledging the massive risk that Tesla accepted when they started building this factory in May 2020. And this has to do with Germany’s exceptionally complicated and lengthy approval process, which is nuts. Tesla have been doing all of their construction to date at the GigaFactory on a pre-approval or partial approval basis from the German government. And that means that the entire factory, which is mostly complete, could still be denied it’s final approval. And if, in some extreme circumstance, the government chooses to deny that approval, Tesla would be obligated to take apart everything that they’ve already built and return the land to the state that they found it in. All at Tesla’s expense. That’s bonkers, right? It blew my mind when I read that one. Not only do they have to deconstruct the entire factory, but they also have to reforest the entire location.
Now, the chances of this ever happening are extremely, extremely small. It’s mostly just a very dramatic point to show how extreme the German process can be. The greatest risk is that Giga Berlin continues to be trapped in a cascade of consultations and approvals that drag the timeline out for several more months or even years. It has been 19 months now since Tesla filed their application for final approval of the GigaFactory and there is no indication this will be coming anytime in the near future. So, if the choice is either to take on the risk of a denial and just start building anyway, or wait two years plus for your application to make its way through the process - then Tesla made the obvious choice. It’s all a bit of shame, when Elon talked about this factory last summer he told us that people would be amazed by the speed of construction. And coming off his success with Giga Shanghai, where the plant was completed in just 11 months, Elon had reason to be cocky. But in the case of Germany, he was definitely over confident.
If you want an illustration of just how slow the Germans can go on a major construction project, look at the Brandenburg Airport, just a stone’s throw away from the Tesla construction site. Berlin’s new international airport began the planning phase in 1991. Construction didn’t begin until 2006. And the god damn airport didn’t begin operations until October 2020. It’s a complicated story there, obviously. But it just goes to show.
The Location
Giga Berlin is a convenient name for the factory, but it lacks some precision that is going to be necessary for truly understanding this whole situation. The GigaFactory is about 25 miles outside of the city of Berlin to the East, in the district of Brandenburg. And the actual parcel of land for the factory is part of the village of Grunheide (Groon-hyde).
This is an unusual location for a car manufacturing plant in Germany, because the traditional automotive companies - Volkswagen, BMW and Mercedes - all have their facilities located in the South of Germany, near Munich. Tesla is up in the North East corner of the country. And this choice in location is going to inform a lot of the complications that we get into in the next section. Tesla isn't building this in an industrialized area, the factory is going up in the middle of a forest in the German countryside. So you know that’s going to ruffle some feathers. It should be said that this particular area has been zoned for industrial use for decades already, and the forest that Tesla are cutting down was originally planted for the express purpose of being turned into cardboard boxes eventually. But that’s not going to make people any less upset that it’s being cut down.
The Objections
This is the thorne in the side of the whole operation, the constant stream of objections from local citizens and organisations. And some of these objectors make very reasonable points that we’re not here to try and dismiss. Though some others are a bit questionable, we’ll get into both sides.
The environment is really the sticking point for the majority of these problems. There are a few residents of Grunheide that are upset about extra noise and traffic and people interrupting the peaceful tranquility of life in their tiny village. But most of them have concerns that revolve around water, wildlife and trees.
Unfortunately, two-thirds of the Tesla construction site is located in a designated drinking water protection zone. The factory aims to produce an initial volume of 500,000 cars per year, and that would use as much water as a town with a population of 40,000 people. Local residents feared that groundwater levels in the region could fall dramatically when Tesla began operations. And the Brandenburg region is one of Germany’s driest, already prone to long stretches of drought.
Tesla has already made concessions on its water usage, promising to address environmental concerns by planting trees on land three times the size of the Berlin factory plot and reducing its water usage by more than 50 percent. Tesla has also made adjustments to the way that rainwater is collected from the factory roof, it will now be running off into 4 separate locations instead of just one. Tesla is even working with the German officials to create a hydraulic system that would move unused groundwater from nearby Hangelsberg to the factory site and supply all of the necessary water, taking any additional strain off of the local water table. This could be done as early as 2023.
The Germans aren’t wrong to be worried about water use. As we move into a very uncertain 21st century, we’re expecting to see demand for fresh water exceed the sustainable supply in the near future. That’s going to be really bad for a lot of people.
Then there are snakes. Why did it have to be snakes? Construction of Giga Berlin was brought to a halt last winter due to the endangered German smooth snake, who just so happened to be hibernating in the forest that Tesla needed to chop down. There could also have been sand lizards in there as well, according to the environmental activist group who brought the objection to German officials. It wasn’t a prolonged shutdown, as Tesla were allowed to resume just a few days later, they managed to convince officials that they could capture and settle the affected lizards and snakes. And that’s not even the first time they had to rehome endangered species to build this factory, in the early stages of clearing the land, Tesla were forced to move a bunch of endangered bats in order to proceed.
Tesla has actually been very proactive with their commitment to restoring the environment. From the early stages of the project, Tesla made the promise to replant 3 trees for every one that they have to cut down, far exceeding the requirement of one for one. And the reforestation is going really well. When we last checked-in in May, they were already over half way through planting the new trees on over 175 hectares of land.
In spite of all this, environmental groups have persisted in their objections to Giga Berlin. Tesla has been locked in court battles as recently as June with environmentalists who are concerned that poisonous gas will be released from the factory. Back in May, a leftist group set fire to high voltage power cables at the construction site.
It’s a tricky situation, because the majority of Brandenburg residents who were surveyed, over 80 percent of them, said that they were in support of the new Tesla factory. And it does appear in some situations that many of these so-called environmentalist groups are more likely to be plants who are either working for the benefit of the fossil fuel industry or the existing German automakers, or probably both. It’s like, kind of strange that environmentalists would be expending so much energy to fight an electric car plant when there must be other, more harmful things to be upset about. Right? Just an opinion.
The Upside
Alright, that’s enough with the negativity and the frustrations of this whole ordeal, let’s talk about the good stuff. Because there is plenty to be excited about when it comes to Giga Berlin.
Let’s start with the paint shop, because this one hits home for me. Tesla paint choices suck. All of them. And white is particularly crap for the free colour. The only car that has ever looked good in white is the 1970 Dodge Challenger in the movie Vanishing Point. It’s a fact, I’m sorry. Anyway. The new paint shop at Giga Berlin is not only much higher quality than anything Tesla have used before, but it’s also environmentally friendly as hell. We’ve seen some inclinations lately that the painting facility might be getting ready to test. Model Y bodies have been spotted at the factory that have some level of finishing applied - certain people falsely assumed this was green paint, it’s not, it’s primer. But that leads me to believe that maybe Tesla primed and sanded these bodies at an existing factory and then shipped them to Germany so they could experiment with the painting process.
We’ve heard that Tesla is working on some new colours, like khaki and deep crimson. Elon’s personal Model S was painted with a prototype of the deep crimson last summer. The new paint at Giga Berlin will be applied in multiple layers that is supposed to give the colours a depth and brightness that we don’t usually see on a production car. Elon has said that the colours will change with the curvature of the vehicles, it’s a 3 dimensional kind of look that just pops.
In addition to looking cool, the paint shop at Giga Berlin will be a zero environmental impact system, using 70 percent less resources than a traditional system. The painting process is designed by Geico Taikisha - this is the merger of an Italian company, Geico and a Japanese company, Taikisha - and that alone should tell you everything you need to know.
Then there are the batteries, Tesla will be manufacturing 4680 battery cells at Giga Berlin. Tesla recently announced that they are building an entire battery facility on site that will be separate from the vehicle manufacturing plant. This is really good news, obviously, but it comes with some downsides. One of the key reasons for some recent delays in approval from the German government is because of this battery plant. As soon as Tesla changed their plans to build a separate battery facility, it essentially reset their application process back to zero and opened the whole thing back up for public scrutiny and objections, they might even have to go through a town hall process again, where Brandenburg residents are allowed to come out and speak their minds in front of Tesla executives. But this will all be worth it in the long run. It might not happen soon, it’s probably not going to be online until at least Spring of 2022, but by producing a large number of 4680 cells in Germany, Tesla will greatly reduce their overall production costs and decrease production times. They’re eyeing 50 gigawatt hours worth of battery production from this plant at launch, with the expectation that it will eventually ramp up to as much as 250 gigawatt hours in the coming years.
The Champions
As much as it might seem like all of Germany is against this whole project, there are some very key German officials who are championing Tesla’s move into the country. Brandenburg’s Economic Minister Jörg (Yorg) Steinbach has been a vocal supporter of Tesla’s plans in his state, he was instrumental in luring Tesla to the area in the first place. Not only is Steinbach thrilled with Giga Berlin but he also believes Tesla’s approach is one that should be emulated by other German companies. He has said publicly, quote, "I invite every company to come to Brandenburg to invest with the same mentality and willingness to take risks as Tesla." This guy is pretty much the main reason that anything has gotten done for Tesla in Germany, he’s been guiding them through the process, explaining German regulations, pointing out aid packages that are available to the company and facilitating contacts with local labor agencies to support hiring efforts.
Officials like Steinbach are excited about this because they know that the German economy needs forward thinking, renewable energy companies like Tesla if it’s going to remain strong in the coming years. So much of Germany’s labour force remains caught up in the mining and fossil fuel industry. They still burn coal in Germany, it’s still a major part of their electrical grid. The country has a solid plan for transitioning to renewable energy and they are doing great with it, but there is a lot of progress to be made. Particularly in areas like East Berlin, that were on the wrong side of the iron curtain back in the day, there has been a struggle to rebuild the manufacturing sector for the modern world. Steinbach has a vision for Brandenburg emerging as an electric vehicle supply hub in the coming years. Elon Musk has projected that Tesla will create 12 thousand jobs at Giga Berlin in the first phase of operation, and that’s sure to expand over time.
