Tesla Opts to Skip State Subsides for Battery Plant at Giga Berlin

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Earlier today, Tesla announced it has pulled its state aid application for the planned battery manufacturing facility at its Gigafactory in Grünheide, Brandenburg — reports Reuters.

Following the announcement, Tesla CEO Elon Musk expressed his disapproval of government subsidies for corporate projects on Twitter. “It has always been Tesla’s view that all subsidies should be eliminated,” said Musk. “But that must include the massive subsidies for oil & gas.”

The state aid was part of a $3.45 billion USD European Union-approved plan to encourage local electric vehicle (EV) battery production and reduce imports from China by offering subsidies to Tesla, BMW, and other electric carmakers.

By withdrawing its application, Tesla has walked away from a whopping €1.14 billion ($1.28 billion USD) in government funding under the program by year’s end.

“Tesla has informed the Federal Ministry of Economics and the Brandenburg Ministry of Economics… it is withdrawing its IPCEI application for state funding for the battery factory in Grünheide,” said a Tesla spokesperson, referring to European subsidies offered to ‘Important Projects of Common European Interest’, which the EU’s European Battery Innovation project falls under.

Tesla’s refusal of government funding would not affect construction plans for the battery plant, assured the spokesperson.

According to German economy ministry estimates, Tesla itself is investing €5 billion ($5.65 billion USD) in its Grünheide battery plant.

Tesla’s car production facility at Gigafactory Berlin, on the other hand, is almost ready for operation. Construction was completed prior to Tesla’s public factory tour as part of the Gigafactory Berlin-Brandenburg County Fair, and the site cleared its second public objection period last week.

Tesla is now awaiting final approval from the regional government before it formally begins production.

The EV maker also applied for regional funding from Brandenburg in November 2020, according to the regional government’s website. A Brandenburg economy ministry spokesperson said that Tesla has not withdrawn this application as of yet.

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