Tesla Gains Approval to Expand German Plant, Nears 1M EVs Yearly

Tesla is advancing towards its goal of manufacturing 1 million electric vehicles annually at its German gigafactory as authorities in Brandenburg state have approved the company's revised expansion plans.

The approval, reported Thursday by German press agency DPA, permits Tesla to proceed with scaled-back expansion efforts aimed at doubling its current production capacity. Initially, the plans faced local opposition, but the revised version eliminates the need to clear approximately 250 acres of nearby forest.

The Gigafactory, located outside Berlin, has faced regulatory challenges and community resistance since its inception. In 2023, Tesla was cited for environmental incidents, including significant spills of paint, aluminum, and diesel into the surrounding area. An arson attack earlier this year led to a temporary shutdown, resulting in an estimated US$1 billion loss.

Tesla's German factory is becoming increasingly vital in meeting European demand. Last year, Europe imported 170,000 Tesla EVs from China, where the Shanghai factory has an annual production capacity of over 950,000 vehicles. This reliance on imports may shift as the European Union considers tariffs on Chinese EV imports, potentially making locally produced vehicles more attractive.

Tesla's main competitor, Chinese automaker BYD, plans to expand its European presence with a new factory in Hungary, aiming to surpass Tesla's regional market share by 2030. However, the Hungarian facility's projected completion timeline suggests Tesla could maintain its lead as BYD works towards achieving an annual production capacity of 200,000 vehicles.

Tesla delivered 443,956 vehicles in the second quarter of 2024, slightly down from the 466,000 units delivered in the same period last year.