Tesla’s stocks and Brandenburg land purchase
In Germany, the Finance Committee of the Brandenburg State Parliament has approved the purchase agreement for the site of the planned Tesla factory in Grünheide.
The purchase price was initially estimated at just under 41 million euros. Now the Tesla board just has to approve the purchase contract.
The purchase price of 40.91 million euros was recently criticized because Tesla only has to pay 13.52 euros per square meter for the 300-hectare site. In an adjacent area, the price would be around 40 euros per square metre, according to the German newspaper B.Z. There, however, the land has already been developed, while Tesla is acquiring raw building land – i.e. without roads and connections to electricity and water.
Nevertheless, Brandenburg’s Finance Minister Katrin Lange (SPD) said that there would be further expert opinions and examinations regarding the purchase price. “The first major hurdle has been cleared”, Lange said. “The decision was made unanimously with some abstentions.”
However, there was also criticism of the state government, because the purchase agreement was negotiated before Christmas without consulting the Finance Committee. For example, Ronny Kretschmer, the financial policy spokesman for the Left Party in Brandenburg state parliament said: “It is incomprehensible why the committee cannot discuss the sale of the land at its next regular meeting in February – until then, the state government can do its homework and present a recognised market value appraisal from which a final sales price can be determined.”
In the first construction phase Tesla intends to develop 152 hectares of the site and build Gigafactory 4 there. In addition to batteries, the plant will also produce the Model Y and later the Model 3. According to the announcement in the official gazette for Brandenburg as per approval procedure, Tesla plans to start production in July 2021.
Despite the slight kerfuffle in Brandenburg parliament, Tesla can take a reasonably relaxed view of Brandenburg’s political debate. Firstly because the Californian company has just overcome a more important hurdle with the Brandenburg land purchase approval. Secondly, because the Californian company just hit a delivery record for 2019, and lastly because of movement in Tesla’s share prices and market value.
Tesla shares prices are currently jumping from one record to another and are now approaching the 500 US dollar mark. With a valuation of around 89 billion dollars, Tesla is currently worth more on the stock exchange than General Motors (50 billion dollars) and Ford (37 billion dollars) combined. This also shrinks the gap behind Volkswagen to less than ten billion dollars.