(Bloomberg) -- Tesla’s first factory in Europe was supposed to revitalize the region near Berlin with thousands of jobs and millions in extra tax revenue.
It succeeded on both those counts, but discontent over the site could still help deliver the state of Brandenburg to the far-right AfD in elections on Sunday.
The €5 billion ($5.5 billion) Gruenheide facility has been a flashpoint for controversy since it opened in March 2022 following months of court battles. Locals have accused the factory of depleting and contaminating the area’s groundwater, and a proposal to expand the factory was rejected by a large majority of residents in a non-binding referendum in February.
Yet when the local parliament approved a scaled-down version of that plan in May, only the AfD and the left-wing party voted against it. All the mainstream parties gave it their backing.
“That was a slap in people’s faces,” said Manuela Hoyer, head of a local activist group opposing the Tesla expansion. “The state government in Potsdam rolled out the carpet for Elon Musk, while our drinking water is being polluted.”
The AfD leads Chancellor Olaf Scholz’s Social Democrats by 28% to 27%, according to a poll released Thursday by public broadcaster ZDF. If the far-right group is able to leverage the public uproar against Tesla into a victory on Sunday, it would be a serious blow to the ruling party, who have held uninterrupted power in the east German state since 1990.
It could also increase pressure on Scholz to reconsider his plan to run for a second term for chancellor next year. The SPD already suffered major defeats in state elections in two other eastern states, Saxony and Thuringia, three weeks ago.
“People will vote AfD out of protest,” Hoyer added. “The AfD typically jumps on every topic that will bring them voters.”
Even if the far-right party were to win, however, it won’t end up governing as none of the mainstream parties are willing to govern with it.
The backlash against Tesla has scrambled the political landscape in Brandenburg and created some strange bedfellows. In the spring, left-wing activists and AfD sympathizers joined forces to demonstrate against Tesla’s expansion plan. Politicians across the spectrum have also been judged on their stances toward Musk, who has discredited himself with large parts of the German public by repeatedly voicing sympathy for Donald Trump and the AfD.
This has led to the unusual situation in which the AfD’s opposition to Tesla – despite Musk’s support for the party – has helped it in the polls, while the SPD’s support for Tesla is now threatening to undermine its electoral prospects.
“I’ve nothing against Elon Musk personally,” said Lars Guenther, the regional AfD candidate in Brandenburg, adding that he even admired the entrepreneur. “But his Tesla plant is a catastrophe for the people in this region. It wastes huge amounts of water and has become a threat to the environment.”
In addition to local opposition, the Gruenheide plant is struggling with other challenges. A massive drop in electric vehicle sales in Germany has meant that thousands of newly-built Teslas are now languishing at a disused airport because nobody wants them. In recent months the company has fired hundreds of the 12,000 employees at its Brandenburg plant and put its expansion plans on hold.
The Tesla founder has also done little to win over the local population. When Musk visited the plant in 2021, a local reporter asked him whether the project would deplete the region’s water resources. He responded with laughter. “This region has so much water — look around you,” Musk said. “It’s like water everywhere here. Does this seem like a desert to you? It’s ridiculous. It rains a lot.”
Statements like this are why Ulf Kuehnel, one of the regional SPD candidates, thinks the plant’s controversial owner – rather than environmental concerns — are the main problem.
“These reports about contamination and water shortages are blown out of proportion,” he said. “Gruenheide has never had such high business tax revenues.”
Brandenburg’s economy grew 2.1% last year, according to the state’s statistics office – the second-biggest growth rate of all 16 German states. That’s especially impressive considering that the broader German economy is on the brink of recession and has failed to deliver two consecutive quarters of growth since Scholz took office.
The plant has also created political headaches for the Green party, a member of the governing coalition that is polling at less than 5% in Brandenburg, according to recent surveys. Green environmental minister, Axel Vogel, approved all the deforestation during the Tesla factory’s construction.
“Never has more forest been cut down in the history of Brandenburg than under its first Green environmental minister,” said local activist Steffen Schorcht.
On a Wednesday afternoon in Gruenheide, leading Green candidate Antje Toepfer was feeling the effects of her party’s slump in the polls. Her campaign stand near the market square had only attracted a few passerby. “Maybe it’s because of the time of day,” Toepfer said. “But the policies of the federal government also don’t really help right now.”
Given Brandenburg’s swing from the center left to the right, “this already feels like a small national election,” observed Michael Burg from the regional CDU.
That has put SPD politicians in an especially difficult position, said Kuehnel, Brandenburg’s Social Democratic candidate. With the chancellor struggling to win over votes, “there are a number of SPD party members here who don’t want to campaign for Scholz in the next national election anymore,” he said.
Dietmar Woidke, the popular state premier from the governing Social Democrats, has already refused to do any campaign events with Scholz for that very reason.
For now, that means the AfD has the strongest footing in Brandenburg – even if its candidate can’t quite bring himself to speak ill of Musk.
“I’m sure that Musk has meanwhile also realized that this is not the ideal location for his factory,” said Guenther.
(Updates with latest poll in sixth paragraph.)
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