Tesla it « America First “. Lured by the Inflation Reduction Act, this vast American subsidy program, Elon Musk’s company decided on Wednesday, February 21, to reduce its investments in Germany. Its Gigafactory, near Berlin, will not become the largest battery factory in the world, it will only manufacture a few components shipped to the United States.
Germany is no match for the Inflation Reduction Act
« Tax breaks from the Inflation Reduction Act influenced our initial plans. Cell production for our batteries will be concentrated in the United States. “announced Tesla in the columns of the HE DOESone of the three most widely read German dailies.
Announced in 2019, operational since last March, the Tesla factory in Germany, named Giga Berlin, aimed to produce 500,000 vehicles per year from 2022. A very, and above all too, ambitious goal. Quickly short of manpower, the factory finally had the weakest output of the firm. According to analysts, production would be 20,000 units in 187 days, against 100 days for the Giga Shanghai.
Beyond vehicle assembly, the plant was initially expected to produce 50 Gwh of batteries per year, making this site the largest battery manufacturer in the world (as of 2019). Tesla has finally announced that it will ultimately only produce components, which will then be sent to US gigafactories.
This reversal is due, as Tesla explains, to the Inflation Reduction Act (IRA). This text, ratified by Joe Biden last summer, aims to encourage Americans to buy American electric cars, built in America. When a buyer meets these conditions, he receives a tax credit of 7,500 dollars. A real accelerator for electric car sales for companies producing in the United States.
Tesla is not the only company to be lured by this green energy aid plan, reports Bloomberg : Volkswagen, German manufacturer, Northvolt, Swedish battery producer or Volvo, Swedish truck manufacturer. Northvolt is said to have pointed out that IRA tax credits cover around 30% of battery manufacturing operating costs.
The exodus of European and foreign companies to the country of Uncle Sam was anticipated and feared by European leaders. Ursula Von der Leyen, the President of the European Commission, denounced the IRA as a ” aggressive attempt to attract our industrial capabilities “. The specter of a transatlantic trade war was even raised, before being denied on the European side. The path of negotiation is preferred, without conclusive results so far, while a subsidy program, in response to the IRA, is being prepared in Brussels.
This turn of Tesla was expected by the German political sphere. Last Tuesday, the Minister of Economics of Brandenburg, region of the plant site, Jörg Steinbach, said ” Tesla has prioritized other stages of production in the United States because tax conditions are more favorable there ».
Brandenburg’s economy ministry said employees shouldn’t be impacted by Tesla’s withdrawal. Elon Musk’s company assured him that the 9,000 people in place would stay there. The site was originally intended to accommodate 12,000 employees, but capacity was reduced with the cancellation of the battery manufacturing project.
