Tesla Aiming for Expansion, Faces Hurdle as German Locals Cast Non-Binding Vote Opposition

By Moon Harper

Feb 22, 2024 12:02 AM EST

Locals near Tesla's large German factory in Grünheide have voted against expanding the company's battery and car assembly plant in a non-binding public survey held by local authorities.

German Locals' Expansion Opposition

The local administration announced the semi-formal citizen consultation results on Tuesday, where 3,499 were against the expansion, while 1,882 were in favor, out of 5,381 votes cast, representing a turnout of approximately 70% in the small settlement east of Berlin, near the Poland border.

Those against the expansion argue that it will affect a water protection area since Grünheide is between two lakes. The group called "Grünheide Citizens' Initiative" that opposed the plans celebrated the outcome. Manu Hoyer said that the rejection is a significant win for preserving forests and water in Grünheide and across Brandenburg and Berlin.

The Grünheide Tesla facility, seen as an eco-friendly alternative to traditional cars, has faced criticism from environmental groups since it was built. It began production in 2022, later than planned, and the company describes it as Tesla's first European production base and its most modern, sustainable, and efficient factory.

Tesla's Expansion Plans

Led by Elon Musk, Tesla plans to construct a rail freight depot, storage facilities, and a kindergarten for employees' kids on-site, saying it will ease pressure on other rail facilities, help recruit more, and enhance supply security.

However, the factory had to stop production due to shipping disruptions caused by Houthi militants in Yemen. DW, a German state-owned broadcaster, first reported on the vote, also said that Tesla needed to clear about 250 acres of forest in a rural community of fewer than 8,000 residents near a nature conservation area for the expansion.

Plans for Tesla's expansion in Grünheide, located in the Brandenburg district about an hour's drive from Berlin, included a rail freight depot and storage facilities that could help Tesla reduce reliance on other logistics providers and prevent production pauses due to parts shortages.

Non-Binding Vote Opposition

The vote, as reported by The New York Times, is nonbinding, with local officials trying to seek alternative solutions.

The German factory temporarily stopped production for about two weeks earlier this year due to a local parts shortage, worsened by attacks on ships in the Red Sea by Houthi militants.

Tesla Remaining to be a Top-Selling Brand in Europe

In the last quarter of 2023, Tesla mentioned that its Berlin-Brandenburg site could make 375,000 Model Y vehicles annually. Its international manufacturing, like in Germany, helps Tesla make their cars more affordable locally by cutting down on transportation and manufacturing expenses and avoiding tariffs.

Tesla remains the top-selling brand in Europe but faces more competition from other brands offering electric vehicles in and beyond Europe.

In January, sales of new electric cars in Europe increased by 29% year over year, as the European Automobile Manufacturers Association reported. Germany and France are currently Europe's largest markets for fully electric vehicles.

Tesla's sales made up 1.7% of all European passenger car sales in January, including electric, hybrid, and traditional models. Tesla's stock has dropped over 20% this year, but on Wednesday, it remained steady at about $193 per share.