Tesla’s Grünheide Factory In Germany Might Shut Down

While it sounds incredible for a plant that opened only a few years ago, the disastrous sales results in Europe, combined with management’s latest threats to the powerful union, suggest that this is exactly what could happen.

For months, it has been written about the demand problems that Tesla is facing in the European market, and now the situation has worsened so much that the very survival of the Gigafactory Berlin is in question.

The justification for opening the Gigafactory was simple: Tesla was selling so many cars in Europe that it was more profitable to manufacture them locally instead of importing them from Shanghai or Fremont. The goal was to localize production, avoid customs duties, and reduce logistics costs. However, that logic only applies if you sell enough cars for the factory to operate efficiently.

New figures for 2025 show a drastic drop in Tesla sales in Europe. To make matters worse, Tesla is selling fewer vehicles in Europe today than it was before the Giga Berlin even went into full production.

In 2022, when the company relied entirely on imports, it regularly recorded significantly higher sales figures. If demand is lower now than in the “import era,” the main justification for covering the huge costs of the German factory disappears.

This brings us to the latest developments in Grünheide. Tensions between Tesla’s management and the powerful IG Metall union have reached a boiling point ahead of upcoming works council elections. The director of the factory, Andre Thierig, reportedly drew a “red line” over the union’s demand for a 35-hour workweek and issued harsh warnings about the future of the plant.

According to a Handelsblatt report, Thierig and management are practically threatening workers: if IG Metall takes control of the works council, future investment in the plant will be halted. Thierig also compared productivity at Grunheide to US and Chinese plants, suggesting the corporation would favor other locations if a union it considers “hostile” takes control.

The sales results clearly show that Giga Berlin has become redundant. The conflict with the union could give Tesla the perfect excuse to admit it. Ironically, all this is happening at a time when Chinese competitor BYD is opening a new factory in Europe. Few electric vehicle experts would have predicted this scenario just five years ago.

• Also See: Tesla To Charge Robotaxi Users More If They Mess Inside The Vehicle