Tesla's (TSLA) global expansion plans are taking a hit due to a local issue at its factory outside of Berlin that Elon Musk was warned about last year.
Last year, Tesla said it is aiming to build up to 10,000 vehicles a week at the plant. After initially scheduling production of Model Y vehicles in November or December 2021, the plant still isn't producing any cars.
The reason? Tesla is still waiting for final approval from local authorities due to concerns about groundwater levels.
Now Tesla is facing a legal challenge set to go to court next week that could delay the company even further.
That's right, the thing that you have access to via your faucet is what is crippling production for an $850 billion company.
The craziest part of this hiccup is that Tesla was warned that water could be an issue at the plant.
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Elon Musk Ignores Berlin Water Warning
Berlin's groundwater has been an issue, in more than one way, over the past three decades.
Between the early 1990's and at least 2015, Berlin's groundwater level had been rising by more than a meter in some areas, causing major infrastructure issues in the city of 3.65 million.
The problem was so stark that the city lined the streets with enormous blue pipes that pumped groundwater into the Spree river.
Fast forward seven years and the problem has reversed. Due to prolonged droughts in the eastern part of the country, even while there has been flooding in the western part of Germany, Berlin may be missing the good old days of excess groundwater.
Tesla was warned of this dynamic, but when Musk was asked last year whether constructing his factory in Brandenburg, about 20 miles outside of Berlin, would deplete the area's water supply, he broke out into laughter, calling the notion completely wrong, Bloomberg reports.
"The current water supply is sufficient for the first stage of the factory,” Brandenburg Economy Minister Joerg Steinbach said in an interview with Bloomberg. But once Tesla expands the site, “we’ll need more.”
Tesla did not immediately respond to a response for comment.
Per the Tesla's contract with local authorities, the Tesla factory would be allotted 1.4 million cubic meters of water annually, equivalent to the amount used by a city of about 40,000 people.
Despite the supply impact, Steinbach told Bloomberg that the majority of Brandenburg citizens want the factory to become operational.
What's At Stake for Tesla In Germany?
Tesla's plan to take a chunk of the European electric vehicle market rests on the shoulders of its Brandenburg plant and the $5.7 billion Tesla is spending to ramp production.
The 500,000 vehicles the plant will produce if it ever gets up to full capacity would more than double Germany's production of electric vehicles in 2020.
Wall Street analysts have pinned their lofty stock prices on the success of Tesla's expansion in Germany.
Credit Suisse raised its share-price target to $1,025 from $830 last month based on optimism about Brandenburg, with analyst Dan Levy writing that the plant "arguably serves as Tesla's most critical incremental source of capacity."
Levy called the German market "ground zero for the global EV inflection."
