Tesla says German plant power outage to continue until end of next week

By Christian Kraemer and Christoph Steitz

BERLIN/FRANKFURT (Reuters) -Tesla on Wednesday said its plant in Germany was expected to have no electricity until March 17, after a suspected arson attack left the company’s gigafactory outside Berlin without power, forcing it to halt production.

Security officials cleared the Tesla site on Tuesday after what Chief Executive Elon Musk called an “extremely dumb” suspected arson attack nearby.

“The plant is expected to be without electricity until the end of next week,” a spokesperson for the company told Reuters, confirming a report by Bild newspaper.

The U.S. electric vehicle manufacturer estimates the incident will cause losses in the high hundred of millions of euros, with 1,000 vehicles left unfinished on Tuesday alone.

E.DIS, a unit of grid operator E.ON, said it was working on a provisional fix at the damaged pylon that caused the outage, hoping to restore supplies to the site as soon as possible, without providing a timeline.

“The E.DIS grid experts are closely coordinating with the industrial and commercial units that have not yet been resupplied, in particular Tesla, as well as the authorities,” it said.

Tesla shares traded down 2.6% at 1650 GMT.

Brokerage Baird Equity Research said it expected sequentially and meaningfully lower deliveries from Tesla in the first quarter, in part because of the suspected arson attack.

It lowered estimates to 421,100 deliveries for the first quarter, compared with Wall Street estimates of 489,000.

INFRASTRUCTURE SECURITY

The Tesla plant has been a focus for climate protesters who oppose a planned expansion of the site.

German industry called for better protection of critical infrastructure on Wednesday after the attack, saying that was crucial to maintaining the investment Germany is seeking to spur growth in Europe’s largest economy, which faces recession.

“Infrastructure is the lifeline of the German economy,” said Martin Wansleben, managing director of the DIHK Chambers of Industry and Commerce.

“Unfortunately, the protection of this infrastructure urgently needs to be adapted to the changed security situation. It is essential that investors continue to see Germany as a safe country,” he said, adding cybersecurity was also a concern.

RWE and E.ON, which operate crucial German energy infrastructure, both said safety and security were priorities.

The government, which has in the last year trumpeted investments from Taiwanese chipmaker TSMC and Intel among others, cautioned against “alarmism” and said this was just one instance.

DHL CEO Tobias Meyer said it was not the first such incident in Germany, but that the group had confidence in the authorities.

German police said they believed a letter purportedly from a far-left organisation called the Volcano Group that claimed responsibility for starting a fire that knocked out electricity around Tesla’s factory was authentic.

In a 2019 report, Berlin authorities listed Vulkangruppen, or volcano groups, as left-wing extremist organisations that have targeted cable ducts on railway lines and in some cases radio masts, data lines or company vehicles.

(Additional reporting by Philipp Krach, Andreas Rinke, Matthias Inverardi and Rachel More; Writing by Matthias Williams, Riham Alkousaa and Madeline Chambers; Editing by Jan Harvey and Barbara Lewis)