Tesla: Is Berlin’s GigaFactory threatened by US subsidies?

Berlin GigaFactory is Tesla’s fourth factory worldwide. Although it was unveiled last March, production of the batteries and Model Y still hasn’t started there. Worse, its future is in doubt.

There are doubts about the future of GigaFactory 4, another name for Tesla’s German factory located south of the German capital. Indeed, the President of the United States passed a law that provides subsidies to companies that assemble their cars. manufacture your batteries on American soil. As an electric car manufacturer, Tesla needs an enormous amount of batteries and therefore manufactures them itself.

Officially, battery production will start soon in Grünheide and there is even talk of factory expansion. Second, there will be a huge production line of Model Y and batteries (the idea of ​​producing 500,000 per year) as a logistics platform to serve the whole of Europe. If the initial plans were to manufacture batteries in Germany, the carrot presented by President Biden has something to think about Elon Musk. Ironically, less than a year ago, the latter demanded the end of all subsidies given by the State.

Elon Musk remains silent on the future of GigaFactory in Berlin

We suspect the billionaire’s decision about the future of battery production is dubious, remembering that Tesla sales are flirting with one million units in 2021 and that the battery subsidy has slashed the price of batteries by nearly 40%. and cars in GigaFactory 4 are stopped. But this does not mean the abandonment of the German factory, moreover, the representatives of the American company have refused any plan changes. Then where is the truth?

In terms of logistics, GigaFactory Berlin is of great importance to Tesla. Batteries for their vehicles have been produced in China so far. Moving some of its battery production from Europe to the United States would represent a marginal cost for the company. On the other hand, he will not be able to deprive himself of such a distribution platform. For a money man like Elon Musk, as for his employees, it’s just a matter of re-evaluating the situation and make a new financial plan. And often with the businessman, all that excitement will turn into profits for the automaker.

Source: Reuters