The Corner

Capital Matters

Green Jobs, They Said: Tesla and the Sand Lizard

Tesla’s Gigafactory construction site in Gruenheide near Berlin, Germany, December 8, 2020 (Hannibal Hanschke/Reuters)

The Financial Times:

Elon Musk’s meteoric rise may have seemed unstoppable in 2020, but the humble sand lizard has put the brakes on Tesla’s plans for a €4bn electric car factory in Germany.

A German court has forced the tech billionaire’s company to halt work cutting down trees on the site of its new gigafactory in a small town south-east of Berlin because of conservation fears for the protected species.

Mr Musk announced last year he had chosen Grünheide as the base for Tesla’s new plant to produce Model Y electric vehicles for the global market, in a decision seen as a big vote of confidence in Germany’s auto sector and in Berlin as a centre for digital technology.

Tesla’s factory, which was expected to open next summer, will produce about 500,000 cars a year. The company is also looking to make batteries at Grünheide for use in its vehicles.

But while many locals have welcomed the Gigafactory project — saying it will bring badly needed jobs to the region — the court agreed with environmentalists that some of the places where Tesla planned to chop down trees were the “habitat of wintering sand lizards which would likely not survive such clearance measures”.

Auto industry experts said the court’s ruling had damaged the country’s image as a place to do business. “Germany has created a disproportionate jungle of regulations which in many places impede big investments,” said Stefan Bratzel, director of the Centre of Automotive Management near Cologne. “It would be very embarrassing for Germany as an industrial nation if Tesla’s investment is significantly affected by this.”

. . . some commentators have warned that the court decision to stop the forest clearance was a bad omen. Marcel Fratzscher, head of the DIW, a think-tank, said it highlighted the “heavy bureaucratic burden and high regulatory uncertainty, which make it costly and time-consuming for companies to realise investment projects” in Germany.

“German law is too often held hostage by vested interests so that Germany is at risk of becoming less attractive as a location for businesses,” he said.

Betting against the German economy is generally unwise, but with energy costs sharply increased by Angela Merkel’s hugely expensive and largely pointless Energiewende (a simultaneous move away from nuclear energy and towards renewables), and the country’s vital auto sector facing the prospect of its industry being turned upside down, not least by the likes of Tesla, times may be going to get a little tougher in that country.

This is thus not the sort of news that Germans who would like their economy to flourish should want to see.

This story is also a reminder that creating ‘green jobs’ may be rather more complicated than Joe Biden may pretend to believe, especially in a nation as litigious as America and especially after he has introduced — as he will — a wave of fresh new environmental regulation.