Tesla shares rally on expectations that German factory will open in March
Shares of Tesla rose more than 7% to close at $870.43on Monday after reports out of Germany indicated that the company is close to receiving approvals to begin commercial production at its new factory outside of Berlin.
According to reports from Tagesspiegel and Der Spiegel, Tesla aims to produce at least half a million cars annually at its “Gigafactory Berlin” (which is being built in Grunheide, Brandenburg), along with batteries for those cars, and will create at least 12,000 jobs there.
Employees at the factory also elected a “works council,” Der Spiegel reported, citing Birgit Dietze, the head IG Metall district of Berlin-Brandenburg-Saxony. IG Metall is considered among the most powerful trade unions in the world.
Tesla CEO Elon Musk has clashed with unions and workers seeking to establish them at Tesla in the U.S.
The NLRB found that Tesla violated labor laws when it fired a union activist, and when CEO Elon Musk wrote on Twitter in 2018: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing?”
Organized labor is more standard and powerful in Germany.
While Tesla is expected to obtain approvals to begin commercial production in the new Berlin factory soon, it still faces hurdles there around its water utility contract.
On March 4th, local environmental groups are expected to argue in an administrative court hearing that the Brandenburg environmental ministry did not conduct sufficient reviews before giving a license to the local water utility to fulfill a contract with Tesla. Reuters reported that the groups bringing the complaint claim the factory would use enough water to support a 30,000-person town.
If environmental groups win, then Tesla will need to wait for the water utility to negotiate with local authorities over where they can source the volume of water needed to run Tesla’s new factory.
Overall, tech stocks were mixed for the day, with most large-cap tech companies finishing near the break-even point.