Last year, when Elon Musk was asked if the factory Tesla is building in Germany would deplete the region’s water supply, he burst out laughing and called the idea “completely false.”
Six months later, water is one of the main reasons the plant is still unable to produce cars.
While Musk in August nonchalantly pointed to water “everywhere” around Berlin, the region is suffering from falling groundwater levels and prolonged drought caused by climate change. That has sparked a legal challenge that will go to court next week and an admission from local authorities that supply won’t be enough once Tesla builds the factory. The problem has the potential to further delay or even halt the 5 billion euro ($5.7 billion) project, which could become a costly impediment to the carmaker’s expansion.
“Certainly Tesla will increase the problem. There may not be enough water for everyone,” said Irina Engelhardt, head of the hydrogeology department at the Technical University of Berlin.
Plant expansion in the eastern state of Brandenburg is key to Tesla’s global ambitions. The automaker needs a production facility in Europe to supply the region’s fast-growing electric vehicle market, which is expected to remain larger and much more competitive than the US for many years to come. While Tesla has built the factory at breakneck speed, it is still waiting for final approval from local authorities as well as Volkswagen AG, Mercedes-Benz AG and Stellantis NV to expand their own electric vehicle lines.
“The current water supply is sufficient for the initial phase of the plant,” Brandenburg Economy Minister Joerg Steinbach said in an interview. As Tesla expands, “we’ll need more.”
Musk, 50, has heavily promoted the factory that Tesla says will eventually produce batteries and about 500,000 cars a year. He tweeted in German, exposed local politicians and held an Oktoberfest-style county fair at the construction site in October. This week, the country’s vehicle regulator said learned they were investigating one of Tesla’s driver-assistance features.
Much of the optimism about Tesla’s growth prospects this year depends on the company’s ability to bring factories under construction near Berlin and Austin, Texas, into operation. When Credit Suisse analysts raised their share price target to $1,025 from $830 last month, the first factor cited was capacity expansion. Analysts led by Dan Levy wrote in the Jan. 18 report that it is “arguably the most important source of Tesla’s capacity increase.” The push here will boost supply in a market seen as “the starting point for the global electric vehicle trend”.
German politicians backed the investment because it promised thousands of new jobs in an area with little heavy industry. However, progress at the site in the small town of Gruenheide has been slower than expected, with the pandemic and backlash from locals over water usage delaying the start of production by several years. month.
The Nabu and Gruene Liga groups sued Brandenburg’s environment office last year, saying they failed to account for the impact of climate change when approving a 30-year license to pump more groundwater to Tesla’s factory. Authorities say the problem is manageable and they are looking for additional supplies. A decision in favor of environmentalists could delay the plant’s opening and could derail all plans altogether. The first trial is scheduled for March 4.
Experts say some of the concerns of environmentalists are well-founded. Brandenburg’s groundwater level has decreased over the past three decades. Drought during the past four years has resulted in wildfires and crop failures. Meteorologists are predicting more frequent heatwaves, further weakening the local ability to store rainfall.
According to Axel Bronstert, a professor of hydrology at the University of Potsdam, Tesla’s plant will nearly double water consumption in the Gruenheide area. He said it was “naive” to think the reserves would be enough for both the plant and the people, and called the groundwater situation in Brandenburg “serious”.
Regardless of the judge’s decision in this case, local water utilities will have to invest in new infrastructure including a wastewater treatment plant to ensure an adequate supply. – large engineering projects that authorities admit can take years.
“There is a significant delay in taking the necessary measures,” Andre Baehler, the head of local WSE water works, said earlier this month during a hearing of the environment committee. Brandenburg parliament.
Last year, Tesla highlighted in its impact report that water is becoming increasingly scarce due to climate change. The company says it draws less water per vehicle produced than the majority of established automakers, and that it is taking steps at its factory in Germany to reduce water use even further.
Under a contract with the local government, the Gruenheide site will receive 1.4 million cubic meters of water annually – enough for a city of about 40,000 inhabitants. Steinbach says that while he takes environmental concerns very seriously, the majority of locals support the plant. Brandenburg authorities are backing drilling efforts to get more water in the area, and supplies can also be obtained from further afield if needed.
But digging a new well probably won’t go away. Manuela Hoyer, who lives just a few miles from the factory, said Tesla is getting favors from local politicians even though it could make an already serious environmental problem worse.
“We’ve been told for years not to water our lawns,” said Hoyer, who is active in overseeing the residents’ project in an interview. “Then the richest man in the world showed up and got everything he wanted.”