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By Victoria Waldersee
BERLIN, Feb 22 (Reuters) - Tesla Inc has begun
assembling batteries in Germany but will focus cell production
in the U.S. in light of Inflation Reduction Act incentives, the
company said, making it one of the first firms to declare a
strategy shift prompted by the package.
The U.S. electric-vehicle maker is also preparing to produce
cell components such as electrodes, some of which will be sent
from its site in Gruenheide in the state of Brandenburg, to the
United States, Tesla said on Wednesday.
Cars produced at the Brandenburg site would in the "near
future" contain batteries assembled locally, it added.
"The focus of Tesla's cell production is currently in the
United States due to the framework created by the United States
Inflation Reduction Act (IRA)," the company said.
EU leaders have expressed concern that local content
requirements of much of the $369 billion of subsidies in the IRA
will encourage companies to abandon Europe for the United
States.
Tesla rival Stellantis said on Wednesday it was
already localising production in the U.S. prior to the IRA,
while earlier this month industrial gases firm Air Liquide pledged to take advantage of a historic opportunity to
invest in clean energy helped by the IRA, but did not give
specific details.
Holcim AG , the world's biggest cement maker,
expects the IRA to provide strong momentum for its business in
North America, and Linde has estimated the
total investment opportunity for the company in the United
States alone could exceed $30 billion over the next decade.
The European Commission has proposed loosening rules on
state aid for investments in renewable energy, decarbonising
industry, hydrogen or zero-emission vehicles, though Germany's
finance minister has warned Europe must not respond to the U.S.
act with excessive subsidies.
Tesla withdrew its application for over 1 billion euros in
German state aid for the battery plant in November 2021, and the
company's Chief Executive Elon Musk tweeted at that time that
"all subsidies should be eliminated".
However, the carmaker still has an open application for
regional funding from the Brandenburg government.
A spokesperson for the German economy ministry said on
Wednesday they were "working on clearing up the reasons" behind
Tesla's decision. Brandenburg's economy ministry said that to
its knowledge, the change of course would not impact the number
of jobs available at the German site.
Musk said in March 2022 that the German 50 gigawatt-hour
battery plant would reach volume production by the end of 2023,
but the plant and car production site have hit their targets
later than planned.
Tesla has struggled to ramp up battery cell production in
Fremont, California, and Austin, Texas, which experts have
attributed to new and unproven techniques the company is having
trouble scaling up.
The EV maker is holding its first investor day on March 1,
laying out the third part of its "Master Plan" which Musk has
said will focus on scaling car production and the supply chain
for battery materials.
Tesla said in late January it would invest over $3.6 billion
to expand its Nevada gigafactory complex with two new factories,
one to mass produce its long-delayed Semi electric truck and the
other to make its new 4680 battery cell.
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EXPLAINER-Why the U.S. Inflation Reduction Act has rattled
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(Reporting by Victoria Waldersee; Editing by Mark Potter, Jason
Neely and Shounak Dasgupta)
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