Tesla's German Factory Needs Help From Shanghai

Matt Posky
by Matt Posky
teslas german factory needs help from shanghai

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]

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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

  • Keith Maybe my market's different. but 4.5k whack. Plus mods like his are just donations for the next owner. I'd consider driving it as a fun but practical yet disposable work/airport car if it was priced right. Some VAG's (yep, even Audis) are capable, long lasting reliable cars despite what the haters preach. I can't lie I've done the same as this guy: I had a decently clean 4 Runner V8 with about the same miles- I put it up for sale around the same price as the lower mile examples. I heard crickets chirp until I dropped the price. Folks just don't want NYC cab miles.
  • Max So GM will be making TESLAS in the future. YEA They really shouldn’t be taking cues from Elon musk. Tesla is just about to be over.
  • Malcolm It's not that commenters attack Tesla, musk has brought it on the company. The delivery of the first semi was half loaded in 70 degree weather hauling potato chips for frito lay. No company underutilizes their loads like this. Musk shouted at the world "look at us". Freightliners e-cascads has been delivering loads for 6-8 months before Tesla delivered one semi. What commenters are asking "What's the actual usable range when in say Leadville when its blowing snow and -20F outside with a full trailer?
  • Funky D I despise Google for a whole host of reasons. So why on earth would I willing spend a large amount of $ on a car that will force Google spyware on me.The only connectivity to the world I will put up with is through my phone, which at least gives me the option of turning it off or disconnecting it from the car should I choose to.No CarPlay, no sale.
  • William I think it's important to understand the factors that made GM as big as it once was and would like to be today. Let's roll back to 1965, or even before that. GM was the biggest of the Big Three. It's main competition was Ford and Chrysler, as well as it's own 5 brands competing with themselves. The import competition was all but non existent. Volkswagen was the most popular imported cars at the time. So GM had its successful 5 brands, and very little competition compared to today's market. GM was big, huge in fact. It was diversified into many other lines of business, from trains to information data processing (EDS). Again GM was huge. But being huge didn't make it better. There are many examples of GM not building the best cars they could, it's no surprise that they were building cars to maximize their profits, not to be the best built cars on the road, the closest brand to achieve that status was Cadillac. Anyone who owned a Cadillac knew it could have been a much higher level of quality than it was. It had a higher level of engineering and design features compared to it's competition. But as my Godfather used to say "how good is good?" Being as good as your competitors, isn't being as good as you could be. So, today GM does not hold 50% of the automotive market as it once did, and because of a multitude of reasons it never will again. No matter how much it improves it's quality, market value and dealer network, based on competition alone it can't have a 50% market share again. It has only 3 of its original 5 brands, and there are too many strong competitors taking pieces of the market share. So that says it's playing in a different game, therfore there's a whole new normal to use as a baseline than before. GM has to continue downsizing to fit into today's market. It can still be big, but in a different game and scale. The new normal will never be the same scale it once was as compared to the now "worlds" automotive industry. Just like how the US railroad industry had to reinvent its self to meet the changing transportation industry, and IBM has had to reinvent its self to play in the ever changing Information Technology industry it finds it's self in. IBM was once the industry leader, now it has to scale it's self down to remain in the industry it created. GM is in the same place that the railroads, IBM and other big companies like AT&T and Standard Oil have found themselves in. It seems like being the industry leader is always followed by having to reinvent it's self to just remain viable. It's part of the business cycle. GM, it's time you accept your fate, not dead, but not huge either.