Tempting US tax benefits?: Tesla’s battery cell factory near Berlin is on the brink
Tempting US tax breaks?
Tesla’s battery cell factory near Berlin is on the brink
09/14/2022 9:26 p.m
Rising energy costs in Europe and tax benefits seem to be causing Tesla to rethink a planned battery factory in Germany. The new cell production plant could be built in the USA instead of in Berlin.
Electric car pioneer Tesla is apparently putting its plans to manufacture battery cells in Germany on hold in order to qualify for tax breaks for manufacturing electric vehicles and batteries in the United States. According to people familiar with the matter, Tesla Inc., which has been working to produce its own batteries for electric cars, has considered moving the cell manufacturing facilities that would be used at the plant near Berlin to the United States. The Wall Street Journal also reports on the car manufacturer’s change of plan.
Manufacturing more batteries in the US could help qualify for additional tax breaks under the Inflation Reduction Act (IRA) that US President Joe Biden signed into law last month. The law provides production tax credits that analysts expect could offset more than a third of the cost of electric car battery packs – assuming the rechargeable cells are manufactured and packaged in the United States.
Tesla’s move further mirrors how the new U.S. law is reshaping the electric car industry and accelerating the race to secure domestic battery cell supplies. In the days following the US law’s enactment, Tesla tells Texas authorities it is scouting regional sites for a factory to refine lithium, a battery raw material now primarily processed in China.
Tesla’s change in battery strategy also comes at a time when energy costs in Europe have skyrocketed as a result of Russia’s invasion of Ukraine, weighing on manufacturers.