Tesla’s expansion into Germany faces hurdles and has stopped temporarily.
Electric vehicle manufacturer Tesla (TSLA) – Get Tesla Inc. Report put its plans to expand its German factory on hold, according to media reports.
Tesla has intended to increase the factory by one third, but the expansion plans were removed from the agenda of the local municipal council, reported Reuters, citing broadcaster rbb.
The item about Tesla’s expansion was removed from September’s meeting by the mayor of Gruenheide, which is about an hour away by car from Berlin. The EV maker has a gigafactory in Berlin that manufactures its models.
The mayor said the item on the agenda needed more details and clarification and decline to state whether the topic would be addressed later in 2022, according to rbb.
In May, Tesla had sent in an application to increase the factory by a third of its size by constructing on a further 100 hectares east of the existing plant, rbb had previously reported.
Tesla currently has 300 hectares of land for the auto factory and battery plant under construction. The company had sought to construct a freight station, logistics areas and parking spaces in the expansion area.
Tesla’s Other Challenges
Electric car makers must be able to source lithium since the mineral is a dominant material to manufacture EVs.
The demand for lithium has increased the past few years as EVs are gaining in popularity and consumers are opting to purchase them.
Lithium is in high demand since the raw material is also used to power mobile phones and tablets as well as power banks and backup power units.
The largest reserves of lithium are located in Australia and Chile, but processing it takes time.
Tesla CEO Elon Musk has promised he would announce the locations of its future factories.
In 2021, the Austin, Texas-based carmaker delivered nearly a million (936,172 units) vehicles and produced almost 1 million (930,422 units).
Tesla has claimed in the past that it would produce 20 million vehicles a year by 2030 because of the high demand for electric vehicles.
“I think it’s aggressive, but not impossible, that we could do 20 million cars in 10 years,” the serial entrepreneur said on the delivery of the first vehicles from the group’s first European plant last March in Germany.
“And that would be a good number because there’s 2 billion cars and trucks in the world that are in active use, so 20 million would be then 1 percent of the global fleet per year.”
Lithium Refinery Plans
Tesla recently made initial plans to build a lithium refinery in Texas with the help of tax breaks.
“Tesla is evaluating the possible development of a battery-grade lithium hydroxide refining facility, the first of its kind in North America, as well as facilities to support other types of battery materials processing, refining and manufacturing and ancillary manufacturing operations in support of Tesla’s sustainable product line,” the company said in a public application filed with the Texas Comptroller’s Office.
The site would process raw ore material into a “usable state for battery production,” Tesla said. “The process Tesla will use is innovative and designed to consume less hazardous reagents and create usable byproducts.”
“The final product, battery-grade lithium hydroxide, will be packaged and shipped by truck and rail to various Tesla battery manufacturing sites supporting the necessary supply chain for large scale and electric vehicle batteries.”
The application was filed in August and Tesla said its plans would be to start construction as soon as this year – “if this site is chosen, early construction could begin in the fourth quarter of 2022. The project will reach commercial operations by the fourth quarter of 2024.”
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This story was originally published September 14, 2022 1:45 PM.
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