Tesla is reportedly again forced to stop construction at Gigafactory Berlin due to the fact that they didn’t give a $100 million security deposit over the potential demolition of the project.
It’s the second time that a missed payment has affected the project.
In October, the Tesla Gigafactory Berlin project had its water shut off, which reportedly affected work, due to the fact that Tesla missed a payment.
It quickly got the automaker moving, and they signed a new contract with the water company and things went back to normal quickly.
However, it doesn’t look like Tesla learned its lesson since another missed payment is now affecting the project, according to reports coming out of Germany.
Tesla didn’t obtain overall approval to build Gigafactory Berlin, and instead, it is operating with partial approvals to keep advancing the project.
Now we learn that in the event the project is not approved, Tesla would be responsible for demolishing it, so it was required to provide a $100 million security deposit for the potential demolition.
Germany’s Zeit reports (translated from German):
The background: Tesla is already allowed to build, although the final building permit has not yet been obtained. In the event that it is never granted, Tesla or another company will have to demolish what has already been built. The financial security deposit serves this purpose. The company has now been granted an extended period until January 4, 2021, to deposit them. Tesla did not want to comment on the decision of the State Office for the Environment when asked.
The $100 million deposit was supposedly due on December 17 and the missed payment has reportedly affected the project.
The publication reports:
Accordingly, Tesla is not allowed to continue installing the machines in the paint shop and clearing the forest, as a decision from the State Environment Agency shows. Tesla would have had to provide a security deposit of 100 million euros by December 17.
Tesla has been moving at an extremely fast speed for the construction of the factory. Several massive buildings are already taking shape.
Tesla is planning to start production at the new factory in July 2021, and it needs to stick to a strict construction timeline in order to be ready in just 12 months. The start of production at the factory is also linked to the launch of the Model Y in Europe.
The automaker is also planning to produce its new 4680 battery cell at the location and use its new structural battery pack design to produce the European Model Y.
Like the last problem, it has nothing to do with money. Tesla must now have close to $20 billion in the bank. A $100 million deposit shouldn’t be a problem.
This is most likely another communication and management issue from Tesla who is trying to move extremely fast on the project.
Ultimately, it shouldn’t be a problem, but it is certainly not a good look for the automaker.
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