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Tesla has an “attraction effect,” says Brandenburg Minister of Economics Jörg Steinbach

by Eva Fox January 08, 2020

Tesla has an “attraction effect,” says Brandenburg Minister of Economics Jörg Steinbach

Economy Minister Jörg Steinbach believes that the planned location of the American electric vehicle manufacturer Tesla in Brandenburg will cause other companies to place their production here.

To do this, the government in Potsdam must cope with the challenges associated with the planned construction of the Gigafactory in Grünheide east of Berlin, Steinbach said in an interview published on Tuesday for Reuters TV. According to the schedule, the first electric cars should go off the assembly line in Grünheide in 2021.

There are already requests from other companies who would like to know why Brandenburg's location was so attractive to Tesla that billions would be invested there. “We already notice this attraction effect today,” Steinbach said.

For example, the US battery system manufacturer Microvast, following Tesla’s announced plans for a production plant in Germany, will also be settling just outside of Berlin. Microvast is moving their European headquarters from Frankfurt am Main to the town of Ludwigsfelde, where they will manufacture battery systems for vans, trucks, sports cars and off-road vehicles from the beginning of 2021.

“This domino effect ... will be crucial for Brandenburg.” And after six to seven weeks, the BASF council will announce its decision to build a battery-powered component factory in Schwarzheide.

In Grünheide, Tesla plans to produce 500,000 electric vehicles a year. The Grünheide contract has attracted attention, especially among German car companies. Steinbach acknowledged that Tesla would not initially start with a collective agreement for employees. “But I understand that Tesla knows that it will have to adapt to this in the medium term and act accordingly in partnership,” said the Minister of Economics, who is also responsible for working in Brandenburg.

Steinbach dismissed fears that Tesla CEO Elon Musk might reconsider his investment decision if there were delays in building the plant. The Minister of Economics sees no problem with a shortage of skilled workers for the new Tesla factory. He believes that the situation will help a high "density of science" in Berlin and Potsdam and proximity to Dresden. For example, due to the announced job cuts at German car manufacturers in southern Germany, Steinbach also believes it is realistic that some of these skilled workers will move to Brandenburg. In addition, workers from Poland can go to work at the new plant.

Tesla was promised that the factory would be provided with enough green electricity to operate. Brandenburg will also continue to expand its own renewable energy production, the minister said.

Steinbach also denied accusations by Hesse's Minister of Economics Tarek al-Wazir that the location in Grünheide prevailed mainly due to higher subsidies, as opposed to competitors from other federal states: “Obviously not. It is not true". For the Tesla CEO, proximity to Berlin also played an important role, “But in the end, the plant is not being built in Berlin, but in Brandenburg.”

Featured image: : dpa / Christoph Soeder

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