Tesla's German plant halts output after suspected arson nearby

BERLIN: Tesla's European Gigafactory near Berlin halted production and was left without power after a suspected arson attack set an electricity pylon ablaze close to the site early on Tuesday. The blaze southeast of the German capital, which did not spread to the Tesla site - the U.S. electric vehicle maker's first manufacturing plant in Europe - was extinguished by the fire brigade, police said.

A Tesla spokesperson confirmed production had stopped and the site evacuated. Tesla's Frankfurt-listed shares were down 2.8% 1115 GMT. It was the latest setback for Tesla, which has had a bumpy ride in Europe of late, facing union pressure for collective bargaining agreements in the Nordics and supply disruptions as a result of attacks on shipping in the Red Sea.

Germany has championed new big-ticket foreign investments at a time when Europe's largest economy is facing recession and grappling with higher inflation and weaker foreign demand. Police are investigating the possible arson attack in the area around the plant, which has been the focus of environmental protests since it was launched by Chief Executive Elon Musk two years ago.

They would not confirm media reports that bomb disposal units had been deployed after emergency services found a sign saying "ordnance buried here". The state police office "has taken over the investigation on suspicion of arson and we are currently investigating in all directions," a police spokesperson told Reuters.

Workers for energy company E.ON are repairing the damage to the high-voltage pylon which knocked out power in the area, the company said. Electricity to surrounding communities was restored except for a large industrial site and a logistics centre, it later said, but declined to elaborate.

TREE HOUSE PROTESTS Tesla's ambitions to expand its plant, which has a capacity of around 500,000 cars a year, hit a roadblock when local residents voted down a motion to fell trees to enlarge it.

The U.S. EV maker wants to double the site's capacity to 100 gigawatt hours of battery production and 1 million cars per year, setting it up to dominate the European market. Environmental activists have built and occupied tree houses in the forested area they expect to be cleared if the expansion goes ahead.

A spokesperson for Robin Wood, a group protesting the expansion, said in relation to the arson incident: "We're totally surprised by the situation," adding a full statement would be issued later. Citizens in Gruenheide last month voted against a motion to clear forest for Tesla to build extra infrastructure like a train station and warehouses, leaving the decision to local authorities.

The plant's production ramp-up has slowed, though the carmaker produced 6,000 cars in a week for the first time in January.