Musk takes Tesla challenge to the home of the combustion engine

You've never heard of Grünheide – Green Heath – but you will soon if Elon Musk has his way, as he usually does.

Next Tuesday the capricious billionaire will land in Berlin and head 40km southwest to the site of his new Tesla factory. The plant has risen out of the sandy soil of a former Brandenburg forest in just two years, a remarkable feat in a country where the minimum unit of time to get anything done is usually the week.

Musk will be joined at the opening by chancellor Olaf Scholz, finally part of a good news cycle amid all the gloom. Clapping enthusiastically, somewhere in the ground, will be electric car enthusiasts like Klaus.

“We’re first-movers, we’ve been driving a Tesla for seven and a half years,” said Klaus at a factory event in Grünheide last year.

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“Eight,” corrected his partner discreetly.

Klaus has the steely smile of a Tesla true believer. As he talks, he embraces a passing stranger wearing a T-shirt that reads: “This is not a car of tomorrow, it’s from today. The others are from yesterday.”

The plan: 500,000 cars a year rolling off the production line, 3,000 factory jobs and up to 10,000 working in total for secondary suppliers and services

Klaus is certain that, very soon, the whole world will know all about his home region of Grünheide. "I think this region will be the new Wolfsburg, " he said, a nod to VW's home 250km west of here.

When Musk announced this car factory in November 2019, he chose an industry awards ceremony – the "Golden Steering Wheel" – knowing that top managers from BMW, VW and Mercedes were in the audience. As they looked on in shock, he took his disruptive war on the combustion engine to the country of its birth.

Engineering

"Everyone knows German engineering is outstanding for sure," he told the black-tie audience. "You know that is part of the reason why we are locating Gigafactory Europe in Germany."

The plan: 500,000 cars a year rolling off the production line, 3,000 factory jobs and up to 10,000 working in total for secondary suppliers and services. In this traditionally economically weak area in the former East Germany, local politicians couldn’t believe their luck.

On Twitter, Musk promised the factory would “come together at an impossible-seeming speed”.

The plan to open last July didn’t happen because Musk hadn’t reckoned with a powerful coalition of German bureaucracy and angry locals. Together, they transformed Tesla Germany into the greatest heath-based drama since Wuthering Heights.

While clearing 170 hectares of woodland – 160 soccer pitches – the construction company found unexploded second World War shells. Then the environmentalists lodged 395 complaints about the disruption to natural habitats of bats, lizards and snakes. Finally came the water war.

Located in a rural area between Berlin and the Polish border, Grünheide is a nature and water reserve. Angry locals – warned for years to conserve water – say that laws have been bent beyond recognition to accommodate the world’s second-richest person.

In a last-minute court case, environmental groups argued that the 1.4 million cubic metres of water a year Tesla needs for its plant – equal to a town of 30,000 people – would drain the region’s supply.

Given additional high water demands from a nearby BASF battery plant, it is likely Grünheide will need to import water from other regions if, as expected, the factory expands.

"My demand that the factory be dismantled hasn't changed," said Steffen Schorcht, of the Grünheide citizens' initiative. "This is the main water source for 70,000 people."

Negotiations

After last-minute knife-edge negotiations, local politicians and courts this week found a way to settle the action, clearing the final hurdle to opening.

It was the final act after a nerve-shattering two years for Brandenburg planning officers. They say they were driven to distraction by Tesla’s warp-speed demands, which clashed with the company’s consistent failure to submit key planning documents on time.

In total, 12 provisional permits were issued just to keep things moving and it was only two weeks ago – with construction long finished and 30 Model Y cars already rolling off the assembly line daily – that final planning permission was granted.

After getting tangled up in German red tape, Musk will have lots to talk about with Scholz next week. Last year he complained to reporters in Grünheide that Germany urgently needs “some kind of active process for removal of rules”.

“Otherwise, over time, the rules will just accumulate, and you get more and more rules, until eventually, you can’t do anything,” he said.

'We are trapped by our own laws and regulations and it took someone like Musk to come from America and push everything aside'

Germany’s leading automobile industry analyst Ferdinand Dudenhöffer agrees, likening Musk’s battle with German bureaucracy to Gulliver versus the Lilliputians.

“We are trapped by our own laws and regulations and it took someone like Musk to come from America and push everything aside,” said Prof Dudenhöffer. “The irony now is that we have politicians here talking of the need for ‘Tesla tempo’, for instance to transform our energy mix. Then, in the next minute, they pass new laws to slow everything down even more.”

Disruptive

Behind public bluster, and jokes about Tesla’s teething problems, Elon Musk’s arrival on their turf has been traumatic for Germany’s century-old carmakers. Prof Dudenhöffer predicts that, in hindsight, they will view the encroaching competitor as a blessing rather than a curse.

Volkswagen, already shaking itself up after dieselgate, has risen to the electric challenge, he suggests. Mercedes is playing catch-up while BMW, he thinks, is struggling.

“Tesla’s arrival highlights the failure of the German auto industry to see the future,” said Prof Dudenhöffer. BMW talk of synthetic fuels in combustion engines, he dismisses as “a tale from 1001 Nights”.

“BMW in Munich says it is ‘technologically open’,” he suggests, “because it has no clear concept for the future.”

In Texas this week, VW chairman Herbert Diess stopped by Tesla's other new factory. He described it as "very impressive... it will very likely set some new benchmarks".

It already has in Germany. VW has just announced plans for a new €2 billion plant, mirroring Tesla efficiencies, for its new Trinity model from 2026.

“I am so happy that we decided a new plant for Wolfsburg,” wrote Mr Diess on Twitter. “Without that – no chance to compete.” Coming soon to Wolfsburg: a little bit of Grünheide.