03 Mar 2020, 13:44
Rachel Waldholz

Tesla could start construction on German e-car factory this month

Frankfurter Allgemeine Zeitung / Handelsblatt

Tesla could break ground on its new e-car factory outside Berlin as soon as this month, and the company could be eligible for 280 million euros in subsidies from the regional government, Brandenburg state economy minister Jörg Steinbach told the Frankfurter Allgemeine Zeitung (FAZ). "In theory, Tesla could receive around 280 million euros in subsidies from the state,” Steinbach told the FAZ’s Julia Löhr.“The EU Commission will decide how much it will actually be in the end. This process will take at least a year." Steinbach, a Social Democrat (SPD), rejected criticism that the state is offering too much, arguing that the potential subsidies are reasonable given the scale of Tesla’s investment, Löhr writes. The company plans to invest about 4 billion euros in the facility and says it could hire as many as 12,000 people."All we’re doing, as other regions also do: We're offering incentives for companies to create jobs in underdeveloped regions," Steinbach said, adding that he hopes the Tesla plant will be the start of an economic renaissance for Brandenburg.

The IG Metall metalworkers’ union has expressed worries that Tesla plans to rely on cheaper labor from Poland, business daily Handelsblatt reports. Steinbach told FAZ that while some of the workforce may come from Poland, he expects most will not, and that Tesla will adhere to the same conditions as the rest of the German auto industry: "We told Tesla from the outset that a company of this size is expected to comply with co-determination and collective agreements. And I firmly believe that Tesla will do the same,” Steinbach told the FAZ. “But now is not the time to exert pressure. First, this factory has to be built."

Tesla has said it plans to produce 500,000 electric vehicles per year at the plant in Grünheide, Brandenburg, starting in 2021. The project has been hailed as a potential gamechanger for the German e-car industry, but has also faced questions about its local environmental impact and potential use of government subsidies. The project was briefly halted last month over local environmental concerns, but Steinbach told FAZ he does not expect protests or environmental issues to stop the project from moving forward.

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