Tesla To Pass On $ 1.3 Billion In German Aid Due To Texas Battery Bet, Report Says

Tesla to forgo € 1.14 billion ($ 1.3 billion) in state aid for the plant it is building in Germany, as it decided to try to produce a new type first large-scale battery cell in Texas, a person familiar with the matter said.

The electric vehicle maker worked on so-called 4680 battery cells at a site near its auto plant in Fremont, California. CEO Elon Musk said last year that after the company proved it could manufacture them on a pilot assembly line there, it would manufacture them on a large scale at the factory it is building in. outside of Berlin.

This enabled Tesla to receive public funds from Germany as part of the European Union’s Important Project of Common European Interest (IPCEI) initiative, which supports the first industrial deployments of battery projects in the states. members. Now that Tesla has shifted gears and produced more than 4,680 cells at its plant under construction in Austin, Texas, she is no longer eligible for the money, according to the person, who asked not to be identified while discussing the private information.

Tesla has informed German authorities that it will not exploit the support plan, Beate Baron, spokesperson for the country’s economy ministry, said on Friday. She did not discuss the reason for the decision.

“Tesla has always believed that all subsidies should be removed, but that must include the massive subsidies for oil and gas,” Musk tweeted after the ministry’s announcement.

Musk, who also heads rocket maker SpaceX, has bristled for years at his critics criticizing him for taking advantage of government support. One example is the US loan that helped Tesla put the Model S sedan into production, which the company repaid earlier. SpaceX is a major contractor for the National Aeronautics and Space Administration and the US Department of Defense.

Tesla has almost completed construction of an electric vehicle plant in the small town of Gruenheide, southeast of the German capital, and also plans to manufacture battery cells at the site.

While Musk wants to start assembling the Tesla Model Ys in Gruenheide before the end of the year, local authorities have yet to grant final approval for the project.

The German Ministry of the Economy estimates that Tesla is investing around 5 billion euros in Gruenheide. Der Tagesspiegel The newspaper reported Tesla’s decision on Friday.