Tesla's Berlin factory set to get approval to start production

BERLIN -- The German state of Brandenburg has called a news conference for Friday at which it will announce its decision on approval for the Tesla assembly plant near Berlin.

"The approval procedure for the e-car and battery factory of the U.S. company Tesla in Gruenheide in Brandenburg is nearing completion. This will be announced tomorrow at a press conference in the State Chancellery in Potsdam," the state government said on Thursday.

Earlier, Handelsblatt reported that Tesla had won final approval from the Brandenburg state environment office for its plant.

Tesla has been awaiting approval for a license to begin production at the factory for several months.

The plant has been delayed by the pandemic, red tape and opposition over water usage and the environmental impact even as German officials have repeatedly signaled that they are behind the projects because it creates thousands of jobs in a region with little heavy industry.

Tesla CEO Elon Musk has been on a charm offensive to promote the project. He has tweeted in German, rubbed shoulders with local politicians and threw an Oktoberfest-style county fair at the construction site in October.

Handelsblatt said Brandenburg state premier Dietmar Woidke would comment on details of the approval decision at the news conference.

The decision does not mean Tesla will be able to start production immediately, the report said, adding the state environment ministry recently said the developer would have to meet further requirements before the plant could begin full assembly.

Tesla is expanding in Europe as sales of battery-electric cars are taking off.

The region invested $113 billion in electrified transport last year, an almost 50 percent jump over 2020, according to BloombergNEF, and its EV market is expected to remain much bigger and more competitive than the U.S. for years to come.

The long-awaited approval will be a boon for Tesla's plans to challenge Volkswagen, BMW and Mercedes-Benz on their home turf, as the European rivals broaden their own electric-vehicle offerings.

Tesla's factory is designed to eventually make batteries and as many as 500,000 cars a year and it will give the EV maker a manufacturing base in one of the world’s most competitive auto markets.

Bloomberg contributed to this report.