Tesla's German Plant Faces Union Clash as Production Lags Behind
Tesla's Grünheide factory in Germany is facing growing tensions between management and the union IG Metall. A leaked recording has deepened the dispute, while production targets and workforce numbers continue to fall short of expectations.
Elon Musk recently praised the plant as one of the most advanced in the world but remains firmly opposed to unionisation efforts there.
The conflict at Tesla's German plant has intensified ahead of upcoming works council elections. IG Metall, which already holds the largest faction on the council, is pushing for greater union influence. Musk, however, has made his stance clear—he will not allow unionisation at the site.
A covertly recorded conversation has added to the turmoil, potentially leading to legal consequences. The recording, whose contents remain undisclosed, has further strained relations between Tesla's leadership and the union.
Despite these challenges, the factory is moving forward with key production plans. Battery cell manufacturing has begun earlier than expected, ahead of the original 2027 schedule. Musk also aims to increase output of the Model Y SUV, though this depends on regulatory approval for expanded Full Self-Driving features.
Looking ahead, Tesla's next major projects include the Cybercab robotaxi, followed by the Optimus humanoid robot and the electric Semi truck. Yet expansion at Grünheide remains uncertain. While Musk has ruled out closing the plant, he has also stated he will not grow it further due to resistance against unionisation. At one point, he envisioned turning the site into Europe's largest factory—but only if local authorities and residents supported the idea.
Current figures show a decline in both workforce and production. Employment has dropped from over 12,400 two years ago to around 10,700 today—a reduction of roughly 1,700 jobs, or 14 percent. Vehicle output in 2024 reached just 211,235 units, well below the 287,000 target, with capacity utilisation at only 56.3 percent.
Musk has repeatedly praised the Grünheide facility, calling it 'one of the coolest factories in the world' and highlighting its cleanliness and advanced design. But the ongoing 'culture war' with IG Metall threatens to overshadow these achievements.
The Grünheide plant now faces a critical period, balancing production goals with escalating labour disputes. Battery production is underway, and future models are in development, but workforce cuts and underutilised capacity remain key concerns.
Musk's refusal to expand the factory—unless conditions change—leaves its long-term role in Tesla's European strategy uncertain.
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