Tesla's German Factory Needs Help From Shanghai

Matt Posky
by Matt Posky

Despite achieving a miraculous global expansion in a period where established industrial conglomerates and regulatory hurdles make it nearly impossible for new automakers to persist, Tesla’s German facility is running behind schedule. Production at the Gruenheide plant (aka Giga Berlin or Gigafactory 4) was originally planned to commence this month, with deliveries kicking off shortly thereafter. But those targets have been shifted closer to the end of this year or the more likely scenario of early 2022.

As Tesla would still like to supply the market, its facility in Shanghai will begin shipping vehicles to Europe in August until local production can be achieved. Model Y crossovers will be imported from China until its German site has its assembly lines humming, which has turned out to be a harder task than the automaker anticipated.

Tesla CEO Elon Musk has repeatedly criticized bureaucratic hang-ups in California, citing them as the reason why he’s shifting much of the business to Texas. Germany has also garnered complaints, with Musk noting that regulatory issues were causing numerous delays in getting its Gruenheide plant operational. Building permits have been repeatedly delayed after environmentalists wanted to protect the forested area the build site was located upon, with claims that setting up a factory would harm endangered animal populations. The company also had a row with its water supplier over allegations that it had not been paying the Strausberg-Erkner water association, something that later turned out to be a miscommunication.

But it’s been issues like these that have stalled progress and ultimately forced Model Ys to come in from China, according to the latest from Automotive News:

Tesla has faced a series of setbacks to opening its German factory, with Musk expressing dissatisfaction with the complex regulation and red tape tangling up the opening of the plant.

The U.S. automaker wants to produce around 500,000 Model Y and Model 3 cars annually in Gruenheide. The company still lacks the final environmental permit for the construction.

Officials from Brandenburg state, where the plant is located, said last week that Tesla had constructed tanks on the site without approval and said they were preparing to fine the automaker.

German news outlets have cited the company as confirming it will still begin delivering vehicles (specifically the Chinese-made crossovers) next month. But the local facility is still supposed to become Europe’s primary sourcing point for Model Y EVs and the necessary batteries once it’s been completed. Unfortunately, the timeline for when remains flexible. Despite having made a substantial amount of headway on the factory already, German authorities have stated that the company will not be able to utilize the aforementioned tanks (and several other structures) it allegedly built without the proper permissions. However, that’s likely to be settled once Tesla drops a sack full of money onto the desk of whatever government agencies need to be reminded of the company’s commitment to the region.

That doesn’t mean conditions are better in China, however. Tesla has been subjected to large (sometimes suspect) recalls in the region and what looks to have been a prolonged smear campaign over allegations that its cars were poorly built and could be used to help foreign entities spy on the Chinese military. Alleged Tesla customers also protested the company the Shanghai Auto Show this year, with several regulatory bodies investigating the quality of locally produced models. Many have argued these moves were political, with state-run media intentionally trying to bully an American company that recently finished a large, technologically advanced production site inside of China.

[Image: Jag_cz/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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6 of 12 comments
  • Indi500fan Indi500fan on Jul 14, 2021

    What's the opinion of Chinese built vehicles from the German consumer? And are the Chinese Teslas better quality than the Fremont ones?

    • See 2 previous
    • Mcs Mcs on Jul 14, 2021

      @FreedMike: IT's not about who you hire for QA. That won't solve the problem. When there are production numbers to meet and they're pushing the line to the limit, there will be QA problems.That comes from family members that were manufacturing engineers and my own early career experience in auto plant automation. Any time there was a production push, that's when I'd hear Sunday dinner table complaints about quality being ignored. My own experience was from witnessing what happened when the line was sped up. Even got told to forget about it when I once ran down to final with a list of cars we screwed up. "Let the dealer take care of it." I think Tesla will eventually have really great quality, but they won't be 100% as long as they have the backlogs and production pushes. When I read about those end of quarter production pushes, I cringe. At least Tesla is getting the quality right for the most part with the batteries. Can't say that for GM and Hyundai and the Lucky Goldstar battery company. I'm fine with Tesla, CATL, Panasonic, and SK batteries, but want nothing to do with LG because of the quality issues. One thing I'm planning on is getting a post purchase inspection by the Tesla independent shop near me to see if they spot anything. The body I'll check myself.

  • Lorenzo Lorenzo on Jul 14, 2021

    Why in the world did they choose to build their factory in (formerly East) Germany? Between the strict environmental regulations, the strong unions, and a punitive legal system that was on display against VW, it would compare unfavorably to a number of other European countries.

    • NN NN on Jul 19, 2021

      Because the hard way is the right way. Germany is the 800lb gorilla of the European market. They will get through the regulatory headaches. Build in Germany to convince/sell to German customers who are pretty nationalistic in their automotive tastes. Once you do that, most anyone else in Europe will buy your cars. Look at German sales for June 2021, Tesla Model 3 is only non-German passenger vehicle (non-commercial) in top 10 sales rankings

  • Geozinger Put in the veggie garden (Western Michigan, we still can get frost this late in the year) finished the remainder of the landscaping updates and hand washed both my beater Pontiac and the Town and Country! Going to the beach today...
  • Rochester I wouldn't obsess over the rate of change, it's happening whether we want it or not.
  • EBFlex At the summer property putting boats in the water, leveling boat lifts, cleaning the lots for summer, etc. Typical cabin stuff in the most beautiful place on the planet
  • Lou_BC I've I spent the past few days in what we refer to as "the lower mainland". I see Tesla's everywhere and virtually every other brand of EV. I was in downtown Vancouver along side a Rivian R1T. A Rivian R1S came off as side street and was following it. I saw one other R1S. 18% of new vehicles in BC are EV'S. It tends to match what I saw out my windshield. I only saw 2 fullsized pickups. One was a cool '91 3/4 ton regular cab. I ran across 2 Tacoma's. Not many Jeeps. There were plenty of Porches, Mercedes, and BMW's. I saw 2 Aston Martin DBX707's. It's been fun car watching other than the stress of driving in big city urban traffic. I'd rather dodge 146,000 pound 9 axle logging trucks on one lane roads.
  • IBx1 Never got the appeal of these; it looks like there was a Soviet mandate to create a car with two doors and a roof that could be configured in different ways.