By Victoria Waldersee

BERLIN (Reuters: Tesla (NASDAQ) will hand over Tuesday the Model Y vehicles made at the Gruenheide factory, which costs 5 billion euros ($5.5 billion). This is the company’s first European production center and the largest investment in a German automobile plant in modern history.

Olaf Scholz, the German Chancellor will be attending Tuesday’s ceremony with Tesla Chief Executive Elon Musk. This is a moment Musk had hoped for eight months ago. However, local officials say it has happened comparatively quickly considering its size.

Musk flagged Master Plan Part 3 of Tesla’s Master Plan, which will outline Tesla’s scaling to “extreme sizes”.

It plans to recruit 12,000 employees and will make the German gigafactory and the adjacent battery plant the most important employer in Brandenburg.

When fully operational, the plant will be capable of producing 500,000 vehicles annually, more than rival Volkswagen’s (450,000) battery-electric cars sold worldwide in 2021. It also has the ability to generate 50 gigawatthours (GWh) battery power and surpass all other facilities in the country.

Volkswagen has a 25 percent market share compared with Tesla’s 13% in Europe’s electric vehicles market. Musk warns that it will be longer to ramp up production than the two-years required for the construction of the plant.

JPMorgan (NYSE) had predicted Gruenheide would make around 54,000 cars by 2022. That number will increase to 280,000 in 2023 and 500k in 2025.

Volkswagen has received 95,000 orders in Europe for battery-electric vehicles this year.

Its timeline, however, is longer than Tesla’s. Tesla expects the EV factory in 2026 to be open and the first battery facility in 2023.

On March 4, Tesla was granted the go-ahead by local authorities to start production. However, it had to meet several conditions regarding water usage and pollution control.

When local environmental groups challenged the water provider’s license granted by the environment ministry, the carmaker was in danger of losing the contract.

The court ruled water extraction was allowed to proceed, providing that the ministry held a fresh public consultation.

Environmental groups could appeal this decision. Citizen initiatives, even if they do not appeal, have indicated that they are ready to resist Tesla’s expansion plans, citing light pollution and water issues.

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