Tesla Inc. (NASDAQ:TSLA) has been forced to halt construction of its Gigafactory in Berlin because the company didn’t provide a security deposit of €100 million over possible demolition of the project.
Construction of Berlin Gigafactory halted
This will be the second time that construction of the project is being halted over a missed payment. In October Tesla missed a payment and the construction of the Gugafactory was affected after water was shut. However, the electric carmaker quickly sorted things out by entering a new agreement with the water company to get things back to normalcy. But it seems the company didn’t learn its lesson as construction has been halted after Tesla missed a deadline to make a security deposit payment.
The Brandenburg state environmental authority orders Tesla to stop outfitting its paint shop and clearing of trees after the company missed the €100 million security deposit payment. The company has until Thursday to guarantee or make around $122 million payment which regulators require as part of the requirements for work permits provided to the company.According to Germany media outlet Der Tagesspiegel the company is going on with the construction without approval from regulators and it is doing so at its own financial risk. Therefore the €100 million guarantees funds to reverse the company’s progress if the project doesn’t get full approval.
Tesla has until January 4 to make a security deposit payment
The company’s lawyers filed for an extension of the deadline to January 15, 2021, stating that the company didn’t receive adequate time to coordinate the payment. The Brandenburg environmental regulatory authority gave the company up to January 4 to come up with the payment but for now, its two permits remain suspended.
Tesla had anticipated commencing production at the Gigafactory by July 2021 and thus needing to maintain a strict timeline to be ready in 12 months. Production at the Gigafactoy has also been linked with Model Y’s launch in Europe. Tesla plans to produce the new 4689 battery cell at the factory.