Tesla Forced to Halt Some Berlin Work Over Missed Payment

Tesla Inc. halted some construction work at its German plant project after failing to make a security deposit with local authorities.

Brandenburg’s environment ministry stopped tree removal activity and the installation of paint-shop machinery at the site until the funds are received, a spokeswoman for the ministry said Friday, declining to comment further.

Tesla needs to provide a 100 million-euro ($122 million) deposit with local authorities to cover the cost of tearing down the factory if the project doesn’t receive final approval, Berlin’s Tagesspiegel newspaper reported earlier. Having missed a Thursday deadline, the U.S. carmaker now has until Jan. 4 to come up with the funds, or risk having preliminary approvals revoked, the daily said.

Any major delays would be a blow for Tesla’s ambitious timetable to have its first European factory up and running by the middle of next year. The company plans to eventually produce as many as 500,000 cars annually at the site, posing a serious challenge to German rivals Volkswagen AG, Daimler AG and BMW AG.

Separately, a local court on Friday ruled that Tesla must scale back tree-clearing at the site, siding partly with environmental groups who had complained the company isn’t doing enough to protect local wildlife. Any logging near railroad tracks close to the plant would likely kill sand lizards hibernating there, the Berlin-Brandenburg OVG court said in an emailed statement.

The court said it would not prevent Tesla from resuming work on most other parts of the 83-hectare (205 acres) plot because the environmental groups didn’t present sufficient evidence wildlife habitat is endangered in those areas.

©2020 Bloomberg L.P.

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