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Are There Concerns About Tesla Giga Berlin Construction Obstacles?

Yes, and no.

Are some people concerned? Yes. Are there things to legitimately be concerned about? No — not in my opinion, at least.

Yes, and no.

Are some people concerned? Yes. Are there things to legitimately be concerned about? No — not in my opinion, at least.

There have been a few recent stories swirling lately about issues or delays at the Tesla Giga Berlin construction site. I don’t know how hopeful any critics and haters are that these will present a real problem for Tesla, but I have seen one sort of wild comment from a person who covers Tesla at a major media site and I’ve also seen strong Tesla fans and bulls concerned about the overall plans for Giga Berlin being realized. Let’s quickly roll through them.

[Full disclosure: I am indeed a Tesla (NASDAQ: TSLA) shareholder. Some think that should preclude someone from covering a company on a news site. From my perspective, people who hold stock in a company are more interested in getting to the bottom of things and put in more work looking at the details or considering context. If something is a serious concern for a company I’m invested in, I want to know. Also, when a stock has grown more than 10,000% in a decade, people who didn’t come along for the ride can easily feel bitter and envious. So, I think there’s potential bias on either side. Lastly — nothing above or below is investment advice. We don’t provide investment advice.]

Tesla × Lizards & Snakes

First of all, on December 8, The Guardian reported, “Tesla has been forced to suspend forest clearing for a new German plant after environmentalists won an injunction over threats to the habitats of resident lizards and snakes.” Reuters reported, “Tesla’s permission to start construction hinges on a conditional approval by local authorities, who are obliged to consult environmental groups and the community.”

Tagesspiegel broke the news and passed along the arguments of two conservation organizations trying to block the project, including the following: “Almost blindly, approvals are granted and Tesla has already installed 30 percent of the construction costs of a gigafactory without final approval, which makes an open-ended evaluation of the application appear increasingly difficult.” On the flip side, Tesla’s case is that the area is critical for a sewer line for the factory and for storage facilities and that the company is catching any lizards and snakes that are in the way in order to release them elsewhere. The conservation organizations think this can’t be 100% correct.

Note again, though, that 30% of the factory’s expected construction costs have already been spent on moving forward and building the factory — I’ll come back to that in a moment.

While these are certainly important matters to work through, and the court has to do due diligence (which is time consuming in a democracy like Germany), it is quite hard to belief that this project will be stopped (this portion of it at least). Some Tesla supporters I’ve talked to have postulated that Tesla may just make this a smaller project than initially intended and put other facilities in other nearby countries. Kyle Field, who is in semi-retirement right now, has commented that 1 in 3 jobs in Germany are related to the auto industry, and 1 in 7 German workers are directly employed by auto companies — and as the industry quickly transitions to electric powertrains and autonomous vehicles, the German auto companies are under serious threat of losing market share or even worse. While that has stirred up opposition to Tesla in the past, it also makes Tesla’s under-construction Giga Berlin all the more important. Whether large German automakers excel or regress from the transition, the gigafactory creates jobs for Germany. However, if those companies do suffer a great deal and lay people off, Tesla offers a lifeline for German workers — something politicians are surely thinking hard about.

To put it in other words, German leaders will very likely make sure that Tesla gets to build its factory and German job creation is secured. And that pressure could come from the highest levels.

Additionally, as everyone knows, we are in the midst of a climate crisis that threatens many species and humanity at an existential level. Germans are some of the most aware when it comes to this topic and taking action to solve it. In the greater scheme of things, fast progress building electric cars and getting them on the roads is an imperative that many people at all levels understand. If Tesla demonstrates that it’s working hard to find and relocate lizards and snakes, is it really going to have its first gigafactory in Europe blocked, delaying zero-emissions vehicles and sending Tesla to another country? I don’t think so.

Construction Halted over €100 Million Missed Payment?

The latest topic that has been creating negative headlines is a missed payment — a €100 million security deposit reportedly was not made by the deadline, December 17. This reportedly halted construction at the factory, but my understanding is the deadline has actually just been extended to January 4, 2021. (Note that those reports come from the same German news site, but the latter one was published a few hours later.)

At least one writer at a major media outlet has insinuated that Tesla doesn’t have money and is forever on the verge of bankruptcy. That is absurd. Tesla has billions of dollars of cash on hand and has had several consecutive profitable quarters — despite the global pandemic, which stopped production at both of Tesla’s vehicle production facilities for periods of time.

I don’t know why the payment wasn’t made, and, like others, I reached out to Tesla for comment but didn’t receive any. However, I assume it’s a simple administrative matter because €100 million is like a penny in a piggy bank for Tesla.

Yes, it would be nice to get some clarity on what is going in in Brandenburg. But anyone who thinks there is a serious financial concern to worry about, in my opinion, is out of their mind.

Crystal Ball

The security deposit itself is for a specific purpose. If all of the necessary permits are not granted, due to the fact that Tesla is proceeding with construction nonetheless, it had to submit cash money in case the constructed facilities needed to be torn down and the site restored somewhat. That’s the extreme case that the most severe Tesla critics and haters are hoping for. However, I’m not aware of anyone genuinely thinking that will happen.

Overall, I can’t imagine Giga Berlin not going forward and being constructed essentially just as planned. Much work has gone into site evaluation and development, and Tesla is a genuine boon to Germany’s economy and security, as well as the world’s climate. Germans are proud to have been picked for this noble mission, and I think they will find a way to persevere and live up to their reputations as some of the best engineers, most environmentally committed, and most practical people on the planet. It is a matter of German pride, and everyone knows about German pride.

 
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Written By

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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