German economy minister warns against delays to Tesla plant

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
An aerial view of land cleared of trees at the site of the new Tesla Gigafactory near Gruenheide, Germany. (Sean Gallup/Getty Images)

Peter Altmaier, Germany’s economics minister, has warned against delays to the construction of Tesla’s (TSLA) new Gigafactory near Berlin.

In an interview with the Funke Media Group on Tuesday, Altmaier said that the electric-car plant was “of great importance for more climate protection.” He added that it was one of the most important industrial developments planned for eastern Germany in a long time.

The electric-car factory will be constructed in Brandenburg, the state surrounding Berlin, on a 300-hectare (741-acre) site. It is expected to create up to 12,000 new jobs.

Tesla’s construction plans ground to a halt on Saturday when a court ordered a temporary ban on felling trees to clear the site.

The Higher Administrative Court of Berlin-Brandenburg issued the injunction after environmental organisation Green League filed an emergency appeal. Work had already begun on Thursday last week to clear over 90 hectares of forest for the Tesla site.

Read More: Tesla plans to produce 500,000 cars a year in Germany

A number of business associations joined Altmaier, warning that if the factory did not get built due to severe delays, it would damage Germany’s ability to attract foreign businesses.

The Federal Association of Small and Medium-Sized Businesses (BVMW) said that “it would be a catastrophic signal from Germany to foreign investors" if the Tesla project failed because of bureaucracy and overregulation.

"The Tesla factory is a lighthouse project in the true sense of the word," BVMW president Mario Ohoven told Handelsblatt, a business daily.

Dieter Kempf, president of the Federation of German Industries, demanded a "faster approval practice in Germany." The Institute of German business said it would be a big problem for Germany if big investments failed due to planning issues, protests and bureaucratic delays.

Tesla plans to produce the Model Y and Model 3 at the new factory, and is targeting 500,000 units annually at full capacity.

Some locals in the Grünheide community, where the factory will be located, have staged demonstrations this year over fears the plant will pollute the groundwater.