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The Tesla Might Be Electric, but Is It Eco-Friendly?

Elon Musk declared he would build a Tesla manufacturing factory in Germany in as early as 2019. The factory only obtained a license to operate end finally opened today. The German regulator, environmental protection organizations, and Russian President Vladimir Putin all played a part.


The Tesla factory, built near Berlin, Germany, was prepared to start manufacturing cars in the summer of 2021, but it only obtained the necessary permits under environmental regulation to manufacture cars this week.


Elon Musk, Tesla CEO, announced his intention to build a factory in Germany to manufacture the Model Y Tesla cars in late 2019. The factory completed construction several months ago, and it is ready to build cars. However, production has not yet started, because the factory only recently obtained a commercial operation license.


Environmental Impact Survey



This license requires the factory to meet regulatory and environmental protection requirements. As part of the application process, Tesla had to submit an environmental impact survey to receive feedback from the public. Hundreds of objections to granting the factory the required permits were submitted as a result. These objections were handled in public hearings, which caused further delays for the factory in obtaining a license.


Moreover, the licensing process triggered demonstrations by German environmental protection organizations. Among other things, the organizations claimed that manufacturing one Tesla consumes excess water (compared with other cars’ manufacturing processes). There was also a concern that the factory, located near several water sources and animal habitats, would materially prejudice the water supply to local residents and the area’s ecological system.


After the prolonged struggle put up by environmental protection organizations and against the backdrop of the Russia-Ukraine War (which is directly affecting gas prices in Europe), the factory finally received a license. For now, it appears the issue has been resolved. German newspapers report that in the coming weeks, the factory will start manufacturing and providing cars already ordered months ago.


This is yet another in a long series of recent cases that prove the environmental issue is material and cannot be dismissed. Environmental awareness is gathering momentum among legislators, regulators, and the public, becoming a force with real influence that can present substantial difficulties to businesses and plans. Such businesses must prepare accordingly.

Tags: Corporate governance | Environmental law