Tesla is still planning to build electric vehicle battery cells in Germany at Giga Berlin, and faster than expected. This contradicts reports earlier this week that Tesla was delaying battery production in Germany with the intention of prioritizing cell manufacturing in the United States, which would help the automaker benefit from recent government incentives.
At the start of the week, the the wall street journal reported that Tesla plans to delay battery cell production outside the United States as recently signed tax credit plans benefit domestic battery manufacturing. Citing people familiar with the matter, the WSJ claimed that cell production equipment in Germany was potentially being shipped to the United States as battery manufacturing plans had taken a drastic turn.
German minister responds to reports of alleged Tesla updates to Giga Berlin battery plans
However, Tesla indirectly debunked the reports, according to German media. RBB24 Friday (via Google Translate):
“The American car manufacturer Tesla continues to produce batteries in Grünheide (Oder-Spree) in Brandenburg. The American electric car maker told third parties according to information from rbb on Friday.
The translation is slightly incorrect, as Tesla does not currently manufacture battery cells in Germany.
The report also says it prioritizes US production, but battery manufacturing systems and machinery have already been installed at Giga Berlin. It plans to start battery production early next year.
The battery manufacturing plant will supply cells for Tesla’s all-electric vehicles built at Giga Berlin, the automaker’s European production plant. Giga Berlin is currently producing the Model Y crossover.
Installing the batteries would create 2,000 jobs in Grunheide, the municipality where the plant is located.
How US battery production will benefit Tesla
Under the new EV tax credit stipulations, which is tied to the introduction of the Cut Inflation Act, from 2023 EVs will only be eligible for certain credits if the battery they use meets certain conditions (via Congressional Research Service):
- Critical minerals ($3,750): Beginning in 2023 (and after the Treasury issues guidance on this requirement), to qualify for this portion of the credit, at least 40% of the value of the battery’s applicable critical minerals must have been mined or processed in the United States. United States or in a country with which the United States has a free trade agreement, or recycled in North America. The 40% amount increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027 and thereafter.
- Battery components ($3,750): Starting in 2023 (and after the Treasury issues guidance on this requirement), to qualify for this portion of the credit, at least 50% of the value of the battery components must have been manufactured or assembled in North America. The 50% amount increases to 60% in 2024 and 2025, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029 and thereafter.
Tesla will benefit from these tax credits anyway, as it plans to build battery cells at its Gigafactory Texas production facility just outside Austin.
Tesla also manufactures the 4680 cells at a facility near the Fremont plant in Northern California. Teslarati recently reported that Tesla had requested the construction of battery cell manufacturing equipment at the Fremont plant, where it currently does not manufacture cells.
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