Tesla’s $122 Million Mistake: Why One Misstep Could Delay Production At Berlin Gigfactory

Tesla (TSLA) has run into more issues at its Berlin Gigafactory plant on Friday, further delaying the company's efforts to get the facility production-ready.

The EV maker has been ordered by the Brandenburg state environmental authority to halt construction as it missed a deadline for payment of a €100 million (about $122 million) security deposit, Der Tagespiegel reported.

At the time, the Gigafactory was preparing for the fitment of its paint shop and was clearing trees on the construction site to add more facilities, the German news outlet said.

Tesla’s Berlin Gigafactory has been plagued with a number of issues since construction started on the site.

In January, German authorities found 187 pounds of undetonated World War II ammunition on the Gigafactory’s site. Brandenburg officials told local newspaper Maerkische Oderzeitung that they estimated that about 25 unexploded bombs could be found on the partially wooded site for the factory, ABC News reported.

The company twice had the water shut off to the facility due to an overdue bill in October and in early December, further hindering construction efforts without access to the large quantities of water needed to make concrete.

Tesla considered stopping forest clearing of 205 acres of pine trees on the construction site when activists Green League and Nature and Biodiversity Conservation Union said the automaker was disrupting the habitat of hibernating snakes and lizards, Business Insider reported.

In the most recent setback, Tesla, which has been racing to get the Berlin plant online, was scheduled to make the payment by Thursday as part of two conditional work permits provided to the company in late November and early December by state regulators, the report indicated.

The Gigafactory is being constructed without full approval from the state, and the company is assuming its own financial risk, which the €100 million payment guarantees funds for reversing Tesla’s progress should the project not be approved by regulators, Der Tagesspiegal said.

Tesla’s attorneys filed for an extension of the Jan. 15 deadline on Wednesday, claiming that the company was not provided enough time to coordinate the payment, the news outlet reported. Tesla now has until Jan. 4 to provide the payment, but until then, the permits are suspended, Der Tagesspiegal said.

Tesla has plans to begin production in Berlin in July 2021, with a ramp-up schedule of 500,000 vehicles a year. There was no immediate word on how the latest issue might affect that timeline.

Shares of Tesla were trading at $674.00 as of 2:19 p.m. EST, up $18.10 or 2.76%.