Tesla has informed local government officials in Gruenheide, Germany, that it is putting plans for a 50 gigawatt-hour battery production facility at Gigafactory Berlin on the back burner.
The automaker will instead divert resources to increasing battery production at its U.S. Gigafactory in Austin, Texas, faster than originally planned, reports Automotive News.
“The EV maker has told local government officials in Gruenheide, Germany, that it still intends to open a battery factory there, where it also opened a vehicle plant this year, but the company now aims to ramp up battery production in Austin faster than planned,” reported the publication on Sunday.
Previously, Tesla was planning to simultaneously expand battery production at both Gigafactories at the same pace. However, a report from The Wall Street Journal last week indicated the electric vehicle (EV) manufacturer was suspending plans to produce battery cells at Gigafactory Berlin-Brandenburg.
German Economy Minister Robert Habeck said after the report that he had no information on changes to Tesla’s battery production plans.
In another report from last week, the battery factory was still on track, and Grünheide Mayor Arne Cristiani said on Monday that Tesla’s plans to operate a battery production facility out of Giga Berlin remain intact.
Unfortunately, it now looks like the project has been stalled after all. Tesla likely wants to ramp up battery production at Giga Texas to qualify for $7,500 USD tax rebates under the U.S. government’s new Inflation Reduction Act (IRA). To be eligible for the rebates, an EV and its battery must be produced in North America.
Increasing battery production at Giga Texas will also let Tesla better cater to high U.S. demand for its EVs. Gigafactory Texas hit a new milestone last week when it produced its 10,000th Model Y, but the facility still faces a production bottleneck as it can’t churn out enough batteries to keep up with demand.
Things have been made even more complicated with Tesla’s ongoing transition from 2170 battery cells to more advanced 4680 cells.
Tesla plans to construct a battery-grade lithium hydroxide refining operation in Texas or Louisiana, according to an application filed with the Texas Comptroller’s Office to aid its U.S. battery production. Tesla said in its application that the project would allow it to process “raw ore material into a usable state for battery production.”
