Tesla's massive new factory in Texas has been slowly ramping up for some time now, and the same has been true of the EV maker's new factory near Berlin, Germany. It recently came to light that Tesla would open a battery factory at the facility in Gruenheide. The company reportedly reached out to government officials with news of the plans. However, after being made aware of potential barriers and delays, Tesla has decided to focus on its Austin factory first.
Tesla can ramp up battery production in Austin more quickly than it can build a battery factory in Germany and get it approved and opened. You may remember, while Tesla opened its factory in Germany in record time compared to most similar ventures, it wasn't without delays. In fact, there was constant pushback, which resulted in one delay after another, and it seemed the factory would never open. Meanwhile, it seems officials in Texas have largely stayed out of Tesla's way.
Automotive News writes that, aside from the reality of delays in Germany, the other reason Tesla needs to shift the focus to Texas is due to the new US federal tax credit. It's coming soon as part of the Biden Administration's Inflation Reduction Act, and it not only has stipulations about where an EV is manufactured, but also where the materials for its battery pack come from.
According to reports, Tesla has officially paused the plans for a 50 gigawatt-hour battery factory adjacent to its vehicle production plant in Berlin. Just a few weeks ago, we reported that the electric automaker was considering reversing course, though now Plan B seems to be already underway.
Tesla's EVs are in very high demand in the US, and it's working to shorten delivery times and eventually reduce prices. Tesla has already significantly reduced wait times on vehicles coming out of China, and it's making some progress on that front in the States as well. However, laser-focusing its efforts on Texas right now could push the plans into high gear.
Currently, most Tesla vehicles coming out of Austin are using the brand's 2170 cells, though the goal is to begin implementing the new 4680 cell battery technology. Tesla has been struggling to get to a point where it can make enough 4680 cells quickly enough that it sees the financial benefit. The issue seems to be perfecting the new manufacturing process.
Tesla plans to launch the Cybertruck next year, so it's been ramping up 4680 cell production accordingly. Panasonic will also be opening a $4 billion battery factory in Kansas, just 700 miles from Austin. However, it will probably be at least two years before it comes online, which won't help with the huge demand for the Model Y and Model 3, especially once the Cybertruck comes to market.
To take it all a step further, Tesla is also reportedly planning on opening its own battery-grade lithium hydroxide refining facility on the Texas or Louisiana coast. To be clear, Tesla still aims to open a battery factory near Berlin. However, it's not going to happen in the near future.