Tesla nabs future factory site in Germany for 41 million euros

By Oliver von Riegen, dpa
Potsdam, Germany (dpa) – US electric carmaker Tesla appears to have scored a bargain for the plot of land in the German state of Brandenburg where it plans to begin construction on its so-called Gigafactory later this year.

The 300-hectare wooded property outside of Berlin is due to cost Tesla 41 million euros (45.6 million dollars), according to a state budget committee document seen by dpa on Wednesday.

At 13.50 euros per square metre, the price appeared to be a steal compared to the assessed value of nearby properties. Land in the neighbouring industrial area of Freienbrink has been assessed at 40 euros per square metre, while land in the Europark Dreilinden business campus costs 310 euros per square metre. Those prices apply to land that has already been developed.

The Brandenburg budget committee is to decide on Thursday whether to approve the deal.

Tesla plans to produce up to 500,000 units annually of its Model 3 and Y vehicles and future models at the Gigafactory in Gruenheide, Brandenburg, east of Berlin, beginning in July 2021.

Construction of the factory is scheduled to start in the first half of 2020. In the first phase of construction, only half of the 304 hectares is due to be used.

The Brandenburg state government and Tesla reached an agreement on the purchase of the property in December. According to the government, Tesla’s board is expected to decide by mid-January whether to approve the contract. Brandenburg’s budget committee is able to approve the contract without formal acceptance from Tesla.

Leftist lawmakers in Brandenburg’s parliament have warned that they would not hand out a blank authorization.

According to budget policy maker and lawmaker Ronny Kretschmer, the purchase price should be determined after the completion of a property valuation – something that the state wanted to hire an appraiser to do by the end of January.

“So far, there has only been an assessment conducted by the state firm Forst, and the result is far below the standard land value of 40 euros per square metre, which is officially stated for the adjacent Freienbrink transport centre,” Kretschmer said. A contract clause on resale is also nebulous and must be clarified, Kretschmer said.