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Tesla Receives Environmental Approval for Factory Expansion in Germany

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Tesla has been granted permission to begin initial work on the expansion of its electric vehicle factory in Grünheide, near Berlin, after securing an environmental permit from the Brandenburg State Environmental Agency. The expansion is expected to significantly boost production at Tesla’s first European Gigafactory, positioning it to become one of the largest car manufacturing plants in Germany.

With the planned expansion, Tesla aims to double the plant’s capacity from 500,000 cars per year to one million, a goal that, if achieved, would surpass Volkswagen’s main plant in Wolfsburg and make Grünheide the largest car factory in the country. Although Tesla has yet to reach its current production target, the expansion marks a significant step toward its long-term growth strategy in Europe.

The new environmental permit allows Tesla to begin the first of three planned expansion phases. This initial phase will involve the construction of infrastructure for storage areas, a battery cell test laboratory, and additional logistics areas. “This is an important milestone and gives us the necessary planning security to implement projects even faster in the future,” Tesla said in a statement to German news agency DPA.

Future phases of the expansion could see the construction of new facilities for car and battery production, though these plans remain contingent on further approvals and market conditions. Tesla CEO Elon Musk has previously emphasized the importance of the Grünheide plant, calling it “crucial for accelerating the production of affordable electric vehicles.” The factory currently employs around 12,500 workers and plays a vital role in Tesla’s efforts to meet rising demand in the European market.

However, Tesla’s expansion plans have faced significant controversy, particularly from environmental groups. The company drew widespread criticism after satellite images revealed that around 500,000 trees had been cleared to make way for the factory’s original construction, sparking protests from local residents and environmental activists. Tesla, known for its commitment to renewable energy and zero-emission vehicles, faced backlash for its environmental impact during the factory’s development.

While the latest approval pertains to construction on land Tesla already owns, a previously approved plan to build a railway station for the factory on an adjacent site has been scaled back following local protests. According to reports from Der Spiegel, the revised plan will require fewer trees to be cut down than originally proposed, addressing some of the concerns raised by environmentalists.

Despite the challenges, the Grünheide factory remains a cornerstone of Tesla’s European strategy, with the expansion expected to enhance its ability to compete in the rapidly evolving electric vehicle market.

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Musk Refocuses on Tesla After Profit Slump, Pledges Major Push on Autonomy

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Elon Musk has announced he will reduce his involvement in government-related work and shift his attention back to Tesla, after the electric vehicle giant reported a sharp fall in profits and revenue for the first quarter of the year.

Speaking to analysts on a conference call Tuesday, Musk said he plans to spend “far more” time on Tesla starting in May, now that the initial phase of work on the Department of Government Efficiency (DOGE) is complete. “I’ll be allocating just a day or two per week to government matters,” Musk said, following months of public scrutiny over his role in the controversial agency.

Tesla’s financial results reflected the challenges Musk now faces. The company posted a 71% drop in profits, with net income falling from $1.4 billion to $409 million. Revenue declined 9% to $19.3 billion, missing Wall Street expectations. Tesla shares, which are down over 40% this year, rose more than 5% in after-hours trading following Musk’s remarks.

“Investors wanted to see him recommit to Tesla,” said Dan Ives, senior equity analyst at Wedbush Securities. “This is a big step in the right direction.”

Autonomous Future Still the Focus

Despite the weak earnings, Tesla reaffirmed ambitious plans for autonomous driving. The company confirmed it will launch a budget version of its Model Y SUV in the coming months and aims to begin a commercial robotaxi service in Austin by June. Musk claimed “millions of Teslas” could be operating autonomously by year-end.

“Can you go to sleep in our cars and wake up at your destination? I’m confident that will be available in many U.S. cities by the end of this year,” he said.

However, industry experts remain skeptical. “The system is not robust enough to operate unsupervised,” said Sam Abuelsamid, an analyst at Telemetry Insight. “It still makes far too many errors.”

U.S. regulators are also watching closely. Tesla’s Autopilot system and “Full Self-Driving” software are both under investigation by the National Highway Traffic Safety Administration over safety concerns.

Rising Global Pressure and Tariff Concerns

Tesla is also contending with fierce competition from Chinese automakers like BYD and growing backlash in Europe, where Musk’s political statements have alienated potential buyers. At home, new tariffs introduced by the Trump administration could affect Tesla’s supply chain and energy storage business, though the company emphasized its mostly domestic manufacturing footprint as a buffer.

Tesla has also halted orders for two models in mainland China amid trade tensions. Nonetheless, it saw a boost from regulatory credit sales, which brought in $595 million for the quarter—up from $442 million a year ago. Positive free cash flow of $2.2 billion provided one bright spot in an otherwise turbulent period.

Looking ahead, Tesla will need to deliver on its autonomy promises and win back market share in a rapidly evolving EV landscape.

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Eurozone Economy Stalls in April as Services Sector Contracts Amid Trade Tensions

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Economic activity in the eurozone came to a near standstill in April as heightened trade tensions and uncertainty weighed heavily on the services sector, according to newly released data from S&P Global’s Purchasing Managers’ Index (PMI).

The Composite PMI for the 20-nation bloc dropped to 50.1 in April from 50.9 in March, barely remaining above the 50-point threshold that separates growth from contraction. The decline reflects mounting concerns over global trade, particularly fresh tariffs introduced by the United States, and fragile consumer confidence within Europe.

A deeper look into the data reveals a widening gap between sectors. The services PMI fell into contraction territory for the first time in five months, slipping to 49.7 from 51 in March. Meanwhile, the manufacturing sector showed modest improvement, rising to 48.7 from 46.1—surpassing expectations and suggesting some resilience among producers.

Across the eurozone, business confidence dipped sharply, with survey respondents voicing growing concerns over tariffs, the broader economic outlook, and delays in customer decision-making. Sentiment is now at its lowest since November 2022.

Germany’s Manufacturing Holds Ground Amid Services Slump

In Germany, the bloc’s largest economy, the Composite PMI fell to 49.7 from 51.3 in March, with the services sector suffering the most. The German Services PMI dropped to 48.8, reflecting client caution and trade-related uncertainty.

However, manufacturing showed signs of stabilization, aided by falling energy costs and a rare rise in export orders. “Most manufacturers are weathering the new tariffs better than expected,” said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. “Production increased for the second consecutive month, indicating cautious momentum.”

France’s Downturn Deepens

In contrast, France’s economy continued its downward slide, with the Composite PMI falling to 47.3 in April from 48 in March. The services sector led the decline with a reading of 46.8, while manufacturing showed only minor improvement at 48.2.

“Demand, especially domestically, is weakening,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. “The service sector is under considerable strain, and companies have responded by cutting staff.”

Feldhusen added that political instability and fiscal challenges are compounding France’s economic struggles, warning of ongoing pressure in the months ahead.

Inflation Slows, Supporting ECB Policy Shift

Despite the economic headwinds, inflation data offered some encouragement for the European Central Bank. Input costs rose at their slowest pace since November 2024, and output price inflation eased to a five-month low. Analysts believe this could strengthen the ECB’s case for further rate cuts, with some expecting up to three more reductions in 2025.

“With inflation pressures cooling, there’s more room for policy easing,” said de la Rubia. “We may see more targeted fiscal expansion, especially in areas like defense and infrastructure, which could help lift both manufacturing and services later in the year.”

The April data underscores the eurozone’s fragile recovery path, with analysts urging close monitoring of trade developments and domestic fiscal measures.

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Beijing Warns of Retaliation Over US-Led Trade Deals as Tensions Escalate

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China has issued a strong warning to countries negotiating trade agreements with the United States that come at Beijing’s expense, vowing to take countermeasures to defend its economic interests. The statement follows reports that the Trump administration is pressing US trading partners to distance themselves from China during ongoing tariff negotiations.

In a statement released by the Ministry of Commerce, Beijing said it respects efforts by other countries to resolve trade disputes with Washington through “equal consultation.” However, it emphasized that China would “respond resolutely and reciprocally” to any deals that harm its national interests, adding that it will not tolerate being sidelined in global trade talks.

China accused the US of engaging in “unilateral bullying,” warning that if international trade descends into a system where the strong dominate the weak, “all countries will become victims.” The remarks came amid growing concern that secondary tariffs could be imposed on nations maintaining close trade ties with China.

Last week, reports surfaced that the US is exploring such penalties as part of its broader strategy to isolate China economically. In response, Chinese President Xi Jinping made a high-profile tour of Southeast Asia, visiting Vietnam, Malaysia, and Cambodia. The visits were widely interpreted as a move to solidify regional partnerships and push back against growing US protectionism.

Meanwhile, the tariff battle between Washington and Beijing appears to have plateaued. The US currently imposes 145% duties on Chinese imports, while China has retaliated with 125% tariffs on US goods. Both countries have suggested they are unlikely to raise tariffs further. However, tensions have shifted to non-tariff measures.

Beijing recently introduced export restrictions on a variety of critical minerals essential to US industries. In response, President Trump signed an executive order to investigate mineral imports, calling the resources “essential for economic and national security.” Additionally, the US imposed new fees on Chinese-built vessels docking at American ports, following an investigation launched under the Biden administration.

Despite Trump’s repeated assertions that China will return to the table for a deal, there is little sign from Beijing that negotiations are moving forward.

Markets React to Rising Trade Tensions

Global markets showed clear signs of unease as tensions escalated. During early Asian trading hours on Monday, haven assets surged amid widespread risk aversion. Gold futures jumped 1.8% to a record $3,389 per ounce, while spot prices reached $3,376 per ounce. The euro also strengthened significantly, surpassing $1.50 against the US dollar for the first time since 2021. The Japanese yen and Swiss franc also gained as investors sought safe havens, while US stock futures extended their decline.

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