Tesla’s Austin Gigafactory could be an environmental disaster waiting to happen

Elon Musk promised an “ecological paradise,” but his newest Gigafactory is anything but so far for those living in its shadow.

CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing "Cyber Rodeo" grand opening party on April 7, 2022 in Austin, Texas. - Tesla welcomed throngs of electric car lovers to Texas on April 7 for a huge party inaugurating a "gigafactory" the size of 100 professional soccer fields. (Photo by SUZANNE CORDEIRO / AFP) (Photo by SUZANNE CORDEIRO/AFP via Getty Images)

Elon Musk speaks at the Tesla Giga Texas manufacturing "Cyber Rodeo" grand opening party.

Photo by Suzanne Cordeiro/AFP via Getty Images

Tesla’s latest Gigafactory opened on Thursday in eastern Travis County. The company hosted a launch party dubbed a “Cyber Rodeo.” The invite-only confab saw the factory turned into a rave, complete with a light-up drone display of Tesla vehicles and the visage of doge in the night sky, food trucks and a speech from Elon Musk himself. The richest man in the world told attendees the plant is “going to be better for the environment, because we want to make the cars where the customers are.”

But while the plant promises a shiny and sustainable all-electric future as it pumps out Tesla Model Ys and, eventually, Semis and Cybertrucks, the communities in its shadow are still living in the past. And the Gigafactory could end up leaving them even further behind.

Eastern Travis County is an unincorporated area of East Austin composed of low-income households, and predominantly communities of color. Austin’s Colony, the specific community where the new Gigafactory is located, has a large Spanish-speaking population, while other nearby communities share similar demographics and are historically Black.

Even before the Gigafactory came to town, the area faced challenges, including a lack of access to clean water and poor social services. It’s a place that has essentially been cut off from the city itself, with Austin’s 1928 master plan forcing residents of color out to the east of what is now I-35. That dividing line also meant industries unwanted in the heart of Austin could flourish on its outskirts. Tesla’s Gigafactory could be the latest in the long list of polluters to call the area home.

Gigafactory construction has raised issues from noise and water pollution to clogged roadways. Austin’s Colony residents also see hypocrisy in the plant getting clean public water while theirs is private and dirty. There are also concerns that the Gigafactory’s location along the Colorado River could create an environmental catastrophe should the river overflow its banks. The tensions reflect ones playing out around the world as companies building the all-electric future, like Tesla, set up shop in low-income communities of color.

Photo: Bronte Wittpenn/Bloomberg via Getty Images
Machinery at the Tesla factory under construction on Harold Green Road and State Highway 130 in Austin, Texas.

“When we heard that Tesla was considering moving into the area, there was a great deal of trepidation with what they would or would not provide,” Austin’s Colony resident and community activist Richard Franklin told Protocol. “Our thought process was: We know that they’ve had some issues; we know that they may be bad actors. But we have so many other issues [from before] they got here that it’s almost to the point of saying, ‘Well, what else could go wrong?’ Our hope is that by bringing something as huge as Tesla into this area, we would increase its profile so that people would start paying attention to all the shortcomings.”

The Gigafactory is located right behind Franklin’s house on the site of former aggregate mining operations, which have a long history in the area owing to copious sand and gravel deposits. Tesla’s entry into the community has increased property values in the area roughly 22% from 2020 to 2021, according to an analysis by real estate service firm Orchard.

But increased land values often lead to gentrification, forcing many longtime residents to leave an area. With home values in Austin skyrocketing, Austin’s Colony residents could someday have no other affordable place to turn. But even as the Gigafactory raises the risk of residents being displaced long term, it poses potential immediate environmental risks. PODER, Austin’s local environmental justice organization, has cited concerns about the Gigafactory’s proximity to the Colorado River, among other issues.

“The Colorado River Conservancy goes from the Longhorn Dam to the Travis County line, and Tesla is right adjacent to it,” PODER director Susana Almanza told Protocol. “Early on, when Tesla said that they were developing a Colorado River ‘paradise,’ we knew that they needed to be sitting at the table with us so we could know exactly what their Colorado River paradise really means for East Austin.”

Elon Musk’s so-called “ecological paradise” has so far failed to materialize. In fact, it’s been the opposite. Many residents have complained to PODER of increased traffic and noise coming from the factory, as well as a higher risk of flooding. The organization is also deeply concerned with Tesla’s water use.

Orange water in sinkReports of orange water pouring out of sinks in communities around the Tesla Gigafactory in Austin. Photo courtesy of Brian Reyes

“Tesla consumes a lot of water, but we are not sure exactly how much water they’re going to be consuming and how much they are going to be discharging,” Almanza said.

Austin’s Colony is one of two communities in the area that rely on privatized water. The quality of that water is a huge concern, with residents reporting orange water pouring from their taps. Franklin said he has to filter it before giving it to his dog, and that it ruins pipes and appliances. But it is his hope that as more people see the contrast between Tesla’s water situation and the community’s, the more pressure it will put on the city to extend its water infrastructure into the community. PODER, too, is considering how to leverage Tesla’s clean water deal for the community.

“We are doing more investigation into how we can get these working-class communities on the city water system like they did Tesla, so they can pay lower bills as opposed to buying from private water sources,” Almanza said.

“Tesla, to me, is just another pawn in the game, another piece on the board in a chess game that involves me, my community and the kids,” Franklin said. “It’s just another piece to be moved around, and we’ve learned to use whatever we can to get what we need.”

But that could come with trade-offs. Franklin’s biggest fear is flooding: The massive Gigafactory spreads over 2,000 acres of cleared swampland. The concrete that has replaced formerly permeable surfaces has effectively removed flood buffers in an area that is next to the Colorado River. And with climate change increasing the odds of heavy rain, that makes the risks of runoff and flooding more serious than ever before.

Just this past August, rainfall blitzed the region and left the state Capitol closed after flood waters filled hallways. Federal data shows Texas is part of a region that saw heavy downpours increase 12% from 1958 to 2016. Meanwhile, the state received a C- on the American Society of Civil Engineers infrastructure report card when it comes to its ability to handle flooding. It’s against this backdrop that the Gigafactory could create serious issues for those living in its hulking shadow and seemingly endless parking lots.

“We’re down river. This is my real fear … I’m afraid the people that live in those low-lying areas right down the river from here are going to die,” Franklin said. Tesla has not yet said anything publicly about its stormwater management policy.

Other community members are more skeptical of this perceived corporate interest to enhanced social services pipeline.

“The area has been described [by Elon Musk] in very colonial terms as this place that is essentially destroyed, that there’s not really people there, it’s just this land to be discovered and modernized and made valuable,” East Austin native Ryan Frisinger told Protocol. “In fact, it’s extremely populated.”

Frisinger lives three and a half miles from the Gigafactory. “There’s always been a history of that out there,” he said, referring to the legacy of polluting industries in the region. “Now that Tesla’s out there, a lot of that is being revealed sort of accidentally because most of the real estate in that area has now acquired value.”

He called Tesla “perhaps the scariest and largest” major company to move into the area and set up an industrial shop. “I worry that the area will become just like Boca Chica,” he said, referring to the site of SpaceX’s Starbase, “where you buy people out and then all you have to say is: We offer them more than market value for their home. There are already signs of that happening.”

Homes in Boca Chica Village near SpaceX facilities in Texas. Photo: Verónica G. Cárdenas for Protocol

The city gave Tesla a $50 million tax incentive to entice the company to put down its Gigafactory roots there instead of Tulsa, Oklahoma, which was also in the running. It’s a move that’s all too familiar as cities around the country try to woo tech companies in exchange for promised economic prosperity.

“Absolutely [the city is complicit in this]. I think that everyone’s mesmerized, and that’s usually how corporations work,” Almanza said. “They all come in dangling a carrot of ‘jobs, jobs, jobs.’ But in essence, we found that the local people don’t really get the jobs, and the jobs they’re talking about are temporary jobs — construction, cleanup — versus the higher-paying jobs and permanent jobs.”

Tesla has also faced criticism from the Texas Anti-Poverty Project for refusing to make the accommodations necessary to hire Spanish speakers in a community that is primarily Latinx. This concern follows a pattern of racial hostility. This past February, Tesla was sued by California Department for Fair Employment and Housing over allegations of creating a hostile work environment for Black employees.

Tesla did not respond to Protocol’s request for comment. The company does not have a PR team, and PODER organizers have already expressed issues with Tesla’s community outreach efforts.

“We just recently had a talk with the community engagement person, and I asked, ‘Well, how are you bringing in these 15,000 people [for the opening party]?’” Almanza said. “He said ‘Well, I don’t really know, that’s not my area.’ I think as a community engagement person, you should know this.”

The Oak Ranch mobile home gated community in Del Valle, Texas. At Oak Ranch, the sales force is regularly fielding inquiries from potential buyers hoping to land a gig at the Tesla Gigafactory. Photo: Sergio Flores/Bloomberg via Getty Images

Now that Tesla is in the community, Almanza said that it has a duty to be a good neighbor — like by using its clout to push for the community’s water rights — and it needs to sustain its relationship with the people living in close proximity.

“Tesla needs to be doing real community engagement, not having one big party and pretending that that’s community engagement,” she said.

What’s happening in eastern Travis County right now is a microcosm of a bigger story playing out around the world as we make the necessary transition to clean energy. The fight to build a better future hinges on drawing down carbon emissions. Yes, Tesla is doing good by bringing that future into existence as the most popular EV manufacturer in the U.S. — but at what cost to local residents?

Tensions regarding how we achieve a sustainable future aren’t just happening in East Austin: They’re happening in lithium flats in Bolivia, cobalt mines in Congo, coal towns in Wyoming and elsewhere.

“We’re accepting some degree of necessary evil in exchange for jobs, improved infrastructure, visibility, community investment, etc., and the overall issue with that is: Where are the examples of this?” Frisinger said. “Tesla has received public subsidies throughout the world and has rarely — if ever — delivered on the performance incentives that are required. They have never tangibly provided evidence for what they’re going to do [for our community] in exchange for all the benefits they’re receiving and the pollution that they’re going to introduce.”

Amber X. Chen is a freelancer.


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