Tesla faces day of reckoning on water supply for planned German plant

BERLIN, Feb 23 (Reuters) – Tesla (TSLA.O) could lose the water provide contract for its long-delayed German plant if environmental teams win a court docket case difficult a licence granted to its water provider at a listening to subsequent week.

The Frankfurt Oder administrative court docket will hear on March 4 a criticism filed by native teams claiming the Brandenburg environmental ministry carried out inadequate checks earlier than granting the licence to the Wasserverband Strausberg-Erkner (WSE) utility.

If the teams win, WSE mentioned it should cancel its contract with Tesla, and negotiations will start once more on the place the plant might supply its water – possible a prolonged course of with no assured resolution.

A spokesperson for the court docket mentioned a choice was anticipated the day of the listening to. Tesla declined to touch upon the case.

An additional delay would put one other spanner within the works for the ability simply as a broader approval course of reaches its ultimate phases.

Elon Musk had hoped to have the plant – key to his ambitions to beat the European market the place Volkswagen (VOWG_p.DE) at present holds the higher hand with a 25% share of electrical car gross sales to Tesla’s 13% – up and working six months in the past.

Following delays, he mentioned in October final 12 months that he hoped to have it operational by December. The corporate has not additional up to date its timetable for the launch.

The teams bringing the criticism, Gruene Liga and Nabu, concern the 1.4 million cubic metres of water a 12 months Tesla wants for the plant – akin to the utilization of a 30,000-person city – will drain the area of consuming water.

Municipally-run WSE has itself flagged issues over water provide.

Whereas the Tesla plant doesn’t use a very giant amount of water – others comparable to BASF’s (BASFn.DE) battery plant just a few hours away use extra – the area’s reserves are finite, WSE spokesperson Sandra Ponetsky mentioned.

“We’re a comparatively water-rich nation,” she mentioned. “However we’d like assist from different areas… Which provider has the capability to simply magic that a lot water out of a hat in such a short while interval?”

ABILITY TO EXPAND

The dispute provides to a listing of challenges confronted by Tesla in current months, from recollects in China and america to scrutiny by U.S. regulators of all the pieces from Musk’s social media posts to accusations of discrimination in direction of staff. learn extra

The U.S. automaker reported file car deliveries within the final quarter of 2021, however CFO Zach Kirkhorn mentioned final month that ramping up each the Berlin and Austin vegetation was wanted to make up for manufacturing misplaced earlier final 12 months to provide chain and logistics points.

“We have deliberately set these factories in places during which they’ve a fairly vital quantity of land and talent to increase,” he mentioned just a few months prior in October.

However WSE has made clear that even when the court docket permits it to extract the water for Tesla’s first stage of manufacturing, servicing any future enlargement to the plant can be inconceivable with out importing water from different areas.

“We knew we had been reaching our limits – however we predicted we would get there in 2050,” Ponetsky mentioned. “By means of Tesla we had been catapulted ahead 30 years.”

Elon Musk has expressed his irritation at Germany’s advanced paperwork on a number of events, arguing it’s at odds with the urgency wanted to battle local weather change.

However activists in Brandenburg have raised quite a few pink flags towards Musk’s manufacturing unit on environmental grounds, expressing concern about all the pieces from the timber cleared for the plant to an endangered snake species on the positioning – and now, water.

“The native populace right here has been informed for years to scale back its water use. Then the richest man on the planet comes alongside and will get all the pieces laid out at his ft,” Manuela Hoyer, Gruenheide resident and chief of a citizen’s initiative opposing the plant, mentioned. “There’s one thing improper with the system.”

The native environmental ministry in Brandenburg maintains there may be sufficient water to service the area and the Tesla plant.

“The native authorities doesn’t see consuming water for the 170,000 folks within the area as threatened,” regional setting minister Axel Vogel mentioned in native parliament in January.

The court docket case is separate to the broader licensing course of Tesla is at present present process for the plant.

The ministry is within the ultimate phases of approving Tesla’s 13,500-page software to start industrial manufacturing, however will nonetheless take “a while”, a spokesperson mentioned.

“Even whether it is optimistic, the choice may have a three-digit variety of pages, and never within the decrease finish, with many situations and necessities,” the spokesperson mentioned.

Reporting by Victoria Waldersee; Further reporting by Nadine Schimroszik; Enhancing by Jan Harvey

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