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Tesla's Germany Plant Seems Cursed

The automaker is dealing with annoying problems like 'environmentalists'

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Tesla is on an adventure in Germany, Aston Martin is on an adventure in Switzerland, and Volkswagen. All that and more in The Morning Shift for June 22, 2021.

1st Gear: Tesla’s Germany Plant Isn’t Going Great

Tesla is basically given free rein in the U.S., outside of the regulations that every other automaker has to comply with, like having factories that follow covid restrictions or not misleading people about cars that can’t pilot themselves.


This is not great, because lives are at stake, but that is also the U.S.’s whole vibe, because this country has rarely squandered an opportunity in the name of freedom to put more lives at stake.

Things are a little different in Europe, where Reuters reports that Tesla’s Germany factory has faced delay after delay because of governmental “red tape” and pesky “environmentalists,” the latter group being people concerned about things like “drinking water” and the former concerned about things like “what the public thinks.” Also, snakes.

Tesla has already pushed back the expected opening to late 2021. Yet the environmental agency in Brandenburg, the state where the 5.8 billion euro ($6.9 billion) plant is being built, has still not given final approval — meaning a further delay cannot be ruled out, even into 2022.

What’s the problem?

It’s complicated.

Tesla and its billionaire boss Elon Musk unveiled plans in late 2019 to build the factory.

But the site partly overlaps a drinking water protection zone and borders on a nature reserve, which has drawn heavy opposition from local residents and environmental groups.

Last year, Tesla had to suspend clearing of a forest at the site after environmentalists from local group Nabu highlighted the risk posed to a rare local snake species whose winter slumber could be disturbed by tree-cutting activity.

The snakes had to be rescued before Tesla could proceed but there have been numerous other efforts to stop work at the site on environmental grounds.

“Thousands of (acres) of forest will be cleared to create the needed infrastructure and housing space,” said Manuela Hoyer, who lives about six miles from the site and is a member of a local campaign opposed to it. “To build such a plant in a protected drinking water area is actually a crime against the environment.”


Anyone who uses the phrase “red tape” is probably a Republican and/or John Stossel.

2nd Gear: Volkswagen Will Not Be Deterred By The Chip Shortage

The company says that its profit forecast for this year remains unchanged, despite, like almost every other automaker, having to make some adjustments because of the chip shortage.

From Reuters:

Volkswagen still expects to achieve a 2021 operating profit margin of between 5.5% and 7% for the group and a margin of 3% to 4% for its main brand, a spokesperson for the company said.

“Fortunately, been we have able to notably limit the negative impact on our customers and thus on delivery figures so far, for example by selling off inventories and other measures,” the spokesperson said.

Business Insider reported on Tuesday that the Wolfsburg-based firm did not expect to be able to produce more than 800,000 vehicles this year due to semiconductor bottlenecks.

The spokesperson declined to confirm that figure and said it was not possible to reliably forecast the impact of the semiconductor shortage on production and deliveries by the end of the year.


The whole chip shortage episode has been a bizarre one. I’m sure automakers will not overcompensate at all in response.

3rd Gear: Aston Martin Is Mad At A Company In Switzerland

Aston Martin is so mad it plans to sue, in fact. Because this is Europe, the whys and hows are impossibly complicated. Also, everyone is rich.


From Bloomberg:

The automaker accused Nebula Project AG of failing to pass some deposits taken from customers along to Aston Martin and said it has terminated an unconventional commercial arrangement its previous management team entered in 2016. Under the now-dissolved deal, Nebula had agreed to fund development of the Valkyrie and other mid-engine cars in exchange for royalty payments.

As a result of terminating the agreement with Nebula, Aston Martin is no longer liable for any potential royalty payments, which could have been “significant” over time, the carmaker said in a statement Tuesday. The company also cut off its dealer arrangements with AF Cars AG, the company that operates Aston Martin St. Gallen in Switzerland, whose board members manage Nebula.

A spokeswoman for the cantonal prosecutor’s office in St. Gallen said they are expecting a lawsuit to be filed but hadn’t received it as of noon Tuesday. A spokesman for Aston Martin St. Gallen was not immediately available to comment, according to a receptionist.

The canton of St. Gallen in eastern Switzerland is home to just 510,000 people but generates gross domestic product of almost 39 billion Swiss francs ($42 billion), making it a natural fit for wealthy fans of supercars. The Valkyrie, which Aston Martin expects to start shipping in the second half of the year, is intended to compete with mid-engine models made by the likes of Ferrari NV and McLaren Automotive Ltd.


Aston is currently steered by the Canadian billionaire Lawrence Stroll, whose son is a mediocre Formula 1 driver. The DBX is doing well, though.

4th Gear: Sorry, Back To Chip Shortage News

Nissan says it is “adjusting” production in Japan because of the chip shortage. “Adjusting” is a euphemism that means halting production and not going at full capacity.


From Reuters:

Japan’s third-largest automaker will halt production at a factory in Tochigi, eastern Japan, for a total of three days in July, the sources said, declining to be identified because the plan is not public.

It will idle its plant in Kyushu, southern Japan for two days next month, they said, adding that the factory will cancel the night shift as well.

Another Kyushu plant will also only operate on daytime shift work for a certain period next month, the people said.

Nissan’s Oppama plant, another domestic assembly plant located in Kanagawa, has been adjusting production since mid-May by operating without a night shift and will continue to do so in July, the sources said.


5th Gear: Amazon Is Investing In Some Self-Driving Truck Startup

The startup is called Plus, and it will probably be as successful as the rest of the autonomous startups, which is to say all hat and no cattle. For now, anyway, as real self-driving tech continues to feel very far away.


From Bloomberg: Inc. has placed an order for 1,000 autonomous driving systems from self-driving truck technology startup Plus and has acquired the option to buy a stake of as much as 20%, Plus said in a regulatory filing, confirming an earlier Bloomberg report.

Amazon has the right to buy preferred shares of Plus via a warrant at a price of $0.46647 per share, the filing shows. That amounts to a roughly 20% stake based on Plus’s shares outstanding before its planned merger with special purpose acquisition company Hennessy Capital Investment Corp. V.

The Sequoia Capital China-backed company, which is developing autonomous driving technology for long-haul trucking, is set to have a valuation of $3.3 billion, adding $500 million in proceeds to accelerate its expansion, the company said in a statement in May. The company raised $150 million via so-called private investment in public equity, or PIPE, from funds including BlackRock Inc. and D.E. Shaw.

Plus declined to comment via an emailed statement. A representative for Amazon said the company couldn’t immediately comment.


Reverse: The Furious And The Fast


CONFESSION: I prefer slow and not mad.

Neutral: How Are You?

I went into Manhattan yesterday for a car event and the subway was on time and I got a seat and I was reminded that everyone in the Meatpacking District is smoking hot and also the joke is on all of the New Yorkers who moved upstate because of the pandemic. New York City is just about perfect right now.