By Victoria Waldersee

BERLIN, (Reuters) – Tesla (NASDAQ:), could lose its long-delayed water supply contract with Germany’s plant if environmental organizations win a lawsuit challenging a permit granted to its water provider at a hearing next Wednesday.

A complaint by local groups alleging insufficient inspections at Brandenburg’s environmental ministry before issuing a license to Wasserverband Strausberg-Erkner will be heard by the Frankfurt Oder administrative Court on March 4.

If the groups win, WSE said it must cancel its contract with Tesla, and negotiations will begin again on where the plant could source its water – likely a lengthy process with no guaranteed solution.

The court spokesperson stated that a decision would be made the day after the hearing. Tesla refused to comment.

An additional delay in approval would be a major setback for the facility as it reaches the final stages of its larger approval process.

Musk had desired to get the plant. It was crucial to his ambitions of conquering the European market. Volkswagen, DE: currently has a 25% share in electric vehicle sales. Tesla is 13%.

He stated that after delays, the company hoped to be operational in December. It hasn’t updated the company on its launch timetable.

The groups bringing the complaint, Gruene Liga and Nabu, fear the 1.4 million cubic metres of water a year Tesla needs for the plant – akin to the usage of a 30,000-person town – will drain the region of drinking water.

WSE, a municipally run organization, has raised concerns about water supply.

While the Tesla plant does not use a particularly large quantity of water – others such as BASF’s battery plant a few hours away use more – the region’s reserves are finite, WSE spokesperson Sandra Ponetsky said.

She stated that the country is relatively water-rich. “But we need help from other regions… Which supplier has the capacity to just magic that much water out of a hat in such a short time period?”

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This dispute is just one of many challenges Tesla has faced in recent months. There have been recalls in China, the United States and scrutiny by U.S regulators on everything Musk posted to social media. Also, there have been accusations of discrimination against workers.

US automaker Ford reported record car deliveries during the quarter ended 2021. But, Zach Kirkhorn (CFO) stated last month that production had been reduced due to logistic and supply chain problems.

He stated that he had deliberately placed the factories at locations where they could expand and have large amounts of land. This was a statement he made in October.

WSE made it clear, however that the court may allow Tesla to use the first stage of its production water extraction process. However, any further expansions to the plant require the importation and servicing of water from other areas.

Ponetsky stated that “We were aware we were at our limits” and predicted that we would reach them in 2050. We were able to accelerate forward for 30 years thanks Tesla.

Elon Musk has repeatedly expressed dissatisfaction at Germany’s complicated bureaucracy, asserting that it does not meet the urgent need to combat climate change.

But activists in Brandenburg have raised numerous red flags against Musk’s factory on environmental grounds, expressing concern about everything from the trees cleared for the plant to an endangered snake species on the site – and now, water.

“The water usage of the local people has been reduced for many years. This was a message that we have given them over and over again. “Then, the wealthiest man in the whole world appears and takes everything at his feet,” Manuela Hoyer (a Gruenheide resident) said. The system is flawed.

Brandenburg’s local environment ministry maintains that there is sufficient water for the Tesla plant and surrounding areas.

Axel Vogel, regional environment minister, stated in January that the local government did not consider drinking water threatened for 170,000 residents of the area.

This court case is independent of the larger licensing process Tesla is currently going through for the plant.

A spokesperson for the ministry said that while Tesla’s 13.500-page commercial production application is being approved by the ministry, they are still in the final stages.

According to the spokesperson, “Even though it’s positive, the decision will contain a number three-digits of pages. It won’t be in the lower end with many conditions or requirements.”