Elon Musk’s Gigafactory Shows the Hollowness of Green Capitalism

Last Friday, authorities gave the go-ahead for Tesla’s Gigafactory near Berlin. The fast-tracked approval for the electric auto plant makes a mockery of environmental and labor standards — but suits the agenda of superficially “greening” German industry.

A Tesla electric car charges in Berlin, Germany (Liesa Johannssen-Koppitz / Bloomberg via Getty Images)

Last Friday, the German state of Brandenburg announced that the planned Tesla “Gigafactory” to the southeast of Berlin has received the final necessary permits. Tesla had received sixteen approvals of various kinds from politicians regarding the project’s likely environmental impact. The start of auto production there has thus moved another step closer — posing the question of what Elon Musk’s project does indeed mean for nature, and all of us.

Tesla has been granted permission to build various infiltration and firefighting basins according to the new “decentralized precipitation drainage concept” — a plan over which the Nature and Biodiversity Conservation Union and the Green League, among others, have raised significant concerns. The basins “protrude into the upper aquifer, and the factory is partly located in a drinking water protection area.” The Strausberg-Erkner Water Association, well-versed in this subject, also raised objections, though they were dismissed by governmental authorities. The extensive concessions to Musk’s firm are excused by citing ambitious state climate targets: a bit of groundwater and a piece of forest will have to be lost, in exchange.

With its smartphones on wheels, Tesla fits in so well with Germany’s climate program that the state government is happy to hand the tech giant a forest area covering several hundred hectares southeast of Berlin. The fact that a nearby water conservation area could be contaminated by industrial waste did not hold back the accelerated approval process, riding roughshod over objections. Instead, in the name of the dubious environmental merits of making electric cars, Tesla is being offered the immediate vicinity of a global metropolis, including infrastructure and access to cheap labor.

Human Resources

Indeed, the state government also supports the “Tesla Speed” project when it comes to dealing with the workforce. Seeing as the new plant fits in so well with the federal government’s digital-green project, under new chancellor Olaf Scholz as under his predecessor Angela Merkel, existing labor laws are being softened accordingly.

Work at the Tesla construction site is permitted around the clock on weekdays and from 7 AM to 8 PM on Sundays. At the same time, trade unions’ warnings about collective bargaining obligations and codetermination rights have gone largely unheeded: for the State Environmental Agency, this was “because the accelerated implementation of such projects for the energy and mobility turnaround is necessary in order to be able to achieve the ambitious climate protection goals.” What’s more, in order to meet the demand for cheap labor from Eastern Europe, the Brandenburg Employment Agency is setting up a special office on the Gigafactory’s site to help Tesla recruit workers for its round-the-clock service.

Two days before Tesla’s success in the approval process, the first election took place for its works council — a structure in Germany guaranteeing employee representation in businesses of a certain size. The pro-employer “Gigavoice” list achieved a majority of seats on the council, but narrowly missed out on a majority of votes. Tesla pulled various levers to achieve this.

German law requires employees to have worked for a company for at least six months before they can stand for the works council. This was also the reason for using “Tesla Speed” in the election process: Musk’s company first hired the management and only later the employees in production, who were therefore to a large extent not yet allowed to vote at this early date. In this respect, the engineering union IG Metall even considers the “only” razor-thin majority for the employer-friendly list a success.

How is it possible for Tesla to build its plant in Grünheide at such “Tesla Speed” and to expand it — almost spontaneously — to include a battery factory? How has Musk managed to bring this company this far, even when the automotive sector has been firmly in the hands of German capital for decades?

The Tesla Model

For some years now, the electromobility market has been stirred up by the American start-up: despite the gigantic barriers to entry, Tesla has managed to establish itself well in the auto market, worth €4 trillion worldwide. With its dazzling CEO Elon Musk at the helm, the company is targeting a clientele that can afford high-end technical toys and does not want to forgo a certain world-saving attitude. This illustrates once again the business potential inherent in the moral promise of green growth.

Tesla’s business model is admiringly referred to by some as “Insane Mode.” Measured against the “business as usual” of the auto industry, things are indeed “insane” at Tesla: Tesla’s cars were sold far below their production costs until two years ago, and the ratio of investment to revenue was accordingly catastrophic. With the construction of the Gigafactories, this has changed in the meantime, but it still needs to be explained how Tesla was able to be successful even before then. This owes to the political protection Tesla enjoys, but also to finance capital’s continuing interest in Tesla shares.

American Subsidies

The California Environmental Protection Agency (CARB) has been promoting electromobility for twenty years now: point systems for car manufacturers, e-car quotas, tax credits for the purchase of low-emission cars, support for the construction of energy filling stations and other infrastructure.

In keeping with free-market logic, “incentives” are to be created to place US capital appropriately in the growing global electric car industry. The diagnosis is clear: an end must be put to the chronically overcrowded roads and the use of fossil fuels in the environment by — from the US perspective — too many German cars. The congenial solution to the problem? The chronic overcrowding of roads and the use of the environment is now to be driven forward by electric, but primarily American cars. And they will do so worldwide.

Tesla is one of the companies that benefits most from this government support. The US Department of Energy has injected a total of $465 million into the company since 2008. Its support was conditional on Tesla using the money to bring itself to the point of profitability. Tesla will receive another $1.9 billion to build battery factories, a crucial point in the e-car value chain.

This political move — stipulating that other car companies can offset their fossil fuel–powered fleets by buying pollution rights from Tesla — provides the company with further revenue, albeit from the coffers of other corporations. In this way, Tesla earns money from the combustion engine–based car industry, which it is at the same time declaring war on.

However, government and corporate funding is only part of the support Tesla receives. Much more decisive is the political will of all the major car-producing nations to ban diesel and gasoline engines in the future. It is this decision by capitalist states to rely on the new technology that opens the entire world market to Tesla — making it one of the most sought-after companies of all, in Grünheide but especially on the stock exchange, where the most decisive judgments about corporations are made.


For finance capital, the decisive factor is not whether Tesla has been (at all) profitable so far, but what profits the company promises to make in the future. Tesla’s business model is based on attracting ever more investors, desperately looking for investment opportunities. This leads to the absurdity — which is nonetheless common on the financial market — that the expectation of future profits is already swelling Tesla’s operating assets. Tesla’s rising prices on NASDAQ and Dow Jones in turn attract even more investors, causing the prices to rise further, and so on and so forth.

This way, Musk has raised about $1 trillion, giving him greater capital power than all his competitors combined. However, there is a catch to all this: Tesla must not lose its investors’ trust. Doubts about the feasibility of self-driving cars had already brought Tesla close to the brink of insolvency. Accordingly, Musk is trying to keep investors happy with various events and grandiose appearances.

The lead that Tesla (still) enjoys in terms of technology and capital power has an expiry date. For its competitors are also pushing ahead with efforts to decarbonize their own auto production and catch up with Musk. Accordingly, Tesla must exploit its monopoly while it lasts and occupy market share by massively expanding the production of profitable automobiles globally. Grünheide is but one of the examples of one of the Gigafactories that are now being built at “Tesla speed.” Hence the financial-capitalist promise of high returns materializes in a factory in Grünheide that again subjugates and exploits humans and the environment, but now in the name of “green growth.”

Unfair Competition?

Tesla is time and again cited as an example of “American corporations” invading Germany and endangering the established social partnership. But those who treat the Grünheide case as a frightening individual case of the “green turn” miss something essential.

For the more established competition is not sleeping, either, and is striving to catch up with Tesla. The “Tesla Speed” development at Grünheide and the compliancy of German authorities are adding to their appetites: “There’s no question,” insists Volkswagen CEO Herbert Diess, “that we have to look at the competitiveness of our plant in Wolfsburg in view of the new market players.” The IG Metall union immediately sensed, in these statements, a possible reduction of up to thirty thousand jobs.

It is, therefore, to be feared that in the coming years, companies and politicians will wage an attack on the natural and economic livelihoods of employees under the morally irrefutable title of “decarbonization.”

Both the Left and the Right of German politics like to criticize the authorities’ partisanship for Tesla as kowtowing to an “undemocratic,” “untransparent,” or even “corrupt” policy, faced with a giant US corporation. In doing so, they miss how well Tesla’s business model fits in with Germany’s envisioned climate-neutral modernization.

With Tesla, the German location adds to its arsenal a player that does not have to “transform” its production, but is already available to conquer the global market. In the words of leading politicians from all parties, “A real stroke of luck for Germany.” For it is not Tesla that is forcing German politics to use people and nature for business ends, but Tesla’s innovative business models that fit so well with the location and its new program.