Germany: Tesla Withdraws Application For Battery Plant Subsidies

Tesla has withdrawn its application for state funding for its battery gigafactory that will be built at at the Giga Berlin in Grünheide near Berlin in Germany. Tesla posted an IPCEI application for regional funding (undisclosed amount) from Brandenburg in November 2020.

According to Reuters, the company was expected to receive €1.14 billion ($1.28 billion) to support the investment (the decision was expected by the end of this year), but Tesla has resigned.

The European Union offers a set of funding opportunities for battery-related projects, which are considered important for the economy or in line with the environmental goals.

It's not clear what happened, as the plan of building a battery cell factory (most likely 4680-type cylindrical cells) has not changed.

"Tesla (TSLA.O) has withdrawn its application for state funding for its planned battery factory near Berlin, the electric vehicle maker said on Friday, adding that construction plans were unchanged.

The European Union in January approved a plan that included giving state aid to Tesla, BMW (BMWG.DE) and others to support production of electric vehicle batteries and help the bloc to reduce imports from industry leader China."

The article says that Tesla intends to invest some €5 billion in the battery plant. Meanwhile, the EV plant is almost ready and mostly awaits the final permit approval before it will be able to start series production of customer cars.

The move to withdraw the application looks pretty strange, especially if the plans really did not change. Some might even suspect that it's a price to pay to get the overall green light for the investment, a shield from unions, or maybe Tesla simply does not want to deal with some potential new drama about subsidies.

See also

Is This The First Pre-Production Tesla Model Y From Giga Berlin?

Tesla's Giga Berlin May Get Permit Approval Before The New Year