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Could water put the brakes on Tesla expansion?

Thursday, 10 March 2022

Just over a year on Elon Musk dismissed any water consumption concerns of Tesla's new Giga factory in Germany, but with the plant still yet to produce a single car, could water put the brakes on Tesla's expansion into Europe?

Water wall blocking Tesla

Back in February 2021, Tesla CEO Elon Musk downplayed the water consumption concerns of the company's latest Gigafactory under construction in Brandenburg, Germany.

When reports came out that the plant would need to draw 372 cubic meters of water every hour from the public water network, Musk quashed this saying: "Tesla won’t use this much net water on a daily basis. It’s possibly a rare peak usage case, but not an everyday event."

One year on and Tesla is yet to produce a single electric car from its new Gigafactory.

Concerns around the amount of water the site will use have been one of the biggest blockers to Tesla achieving final approval from the local Brandenburg authorities.

“Tesla’s water challenges at its new Brandenburg, Germany factory once again demonstrates the need for water issues to be on par with other key business parameters and part of comprehensive business strategies,” said Hugh Share, president of Share Sustainability.

He told Aquatech Online: “Tesla’s ability to grow is key to share price and in this instance, water is a limiting factor to that growth.”

However, Reuters reported on March 4 that Tesla has been given the go-ahead for its Gigafactory, ending almost eight months of delays to the $5.5 billion dollar plant.

Tesla had received a 30-year permit to pump groundwater for its factory, but local environmental groups protested and sued Brandenburg's environment office back in 2021 for not carrying out due diligence regarding the plant's water demand.

Doubling demand

For the past decade, Brandenburg's water levels have been declining, with water levels at the Freienbrink measuring plant decreasing by 50 per cent.

“The current water supply is sufficient for the first stage of the factory,” said Joerg Steinbach, Brandenburg Economy Minister.

“Understanding the local context of water is powerful as it provides companies with insights on how they can best contribute to addressing water issues.”

However, when the plant gets fully operational, it could roughly double the amount of water consumed in the Gruenheide area, according to Axel Bronstert, a hydrology professor at the University of Potsdam.

Tesla's Gigafactory will be key to its expansion into the fast-growing European electric car market as it faces increasing competition from Audi, BMW, Peugeot, Mercedes, and Volkswagen.

"Understanding the local context of water is powerful as it provides companies with insights on how they can best contribute to addressing water issues in the most salient and meaningful manner," said Paul Fleming, water and technology advisor and founder of Water Value LLC.

"How different would the situation be if when Tesla announced its plan to construct the plant, it committed to reducing the use of process water within its facility? This is as well as investing outside the factory walls to help improve the water resiliency of the region,” he added.

Does Tesla take water seriously?

Elon Musk has built a reputation for speaking his mind, with little regard to the consequences his actions might have on social media and even Tesla's share price.

His comments 'laughing' off the water concerns in Brandenburg raised the question once again of how seriously does Tesla take water?

According to its environmental impact report last year, Tesla stated that water is becoming increasingly scarce due to climate change.

“The company has collided with the realities of public policy and the significant impact of how stakeholders view how you manage their water.”

The company also said it withdraws less water per vehicle produced than the majority of established carmakers and that it’s taking steps at the German plant to further reduce usage.

This is not the first time we have heard Tesla play down its water use.

"Tesla has a fairly standard approach to manage water: quantify your water footprint and then develop technology approaches to reduce your water use," said Will Sarni, water strategy consultant and founder of The Water Foundry.

He told Aquatech Online: "The company has collided with the realities of public policy and the significant impact of how stakeholders view how you manage their water. There are several high visibility examples of multinational companies losing their social license to operate because communities viewed them as “taking” their water.”

On the flip side

This is not the first time Elon Musk has been involved in water. The previous incident, however, was far more positive.

Three years ago he donated $480,000 to cover the cost of installing ultraviolet (UV) water stations in all Flint school buildings and the administration building.

At the start of February 2022, Flint Southwestern Classical Academy held a ribbon cutting ceremony for the 78 hydration stations.

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