Tesla to get €1.14Bn in state funding for Berlin battery plant

Tesla may receive 1.135 billion euros for its planned battery cell production in Grünheide near Berlin from the German Ministry of Economics and Technology (BMVi). Local media reports quote new data such as expected job creation and Tesla’s own commitment.

The total investment volume could be around five billion euros, the Tagesspiegel newspaper reports following a ministerial publication. The BMWi, in addition, considers “a figure of 2,000 or more jobs in the battery area of the Grünheide plant to be realistic,” when talking to Tagesspiegel, thus making funding worthwhile.

At the same time, Tesla has not confirmed how much it will invest in the battery plant planned to sit next to Giga Berlin. The BMWi suggests the five billion euros to be an “estimate of the perspective total investment” projected in the additional information for the funding program. Earlier targets mentioned by Tesla CEO Elon Musk set the cell factory’s capacity at over 100 GWh in the longer term.

More factors speak to the information being correct. For example, take the BMVi only last week granting funding to the ACC joint venture following a successful bid for the first Battery IPCEI. As a result, 437 million in state funding was handed over for a battery cell plant in Kaiserslautern. At the same time, the companies involved (PSA, Opel and Saft) will invest around 2 billion euros in the factory. This funding ratio of around 1:4.5 matches the now suggested ratio for Tesla.

Tesla is also one of eleven companies bidding in the second Battery IPCEI. Should the company receive over one billion euros, as mentioned, one-third of the second IPCEI funding of 2.9 billion euros would flow to Tesla.

However, nothing has been confirmed. The process is not yet complete, and the BMWI told Tagesspiegel. They added that “prior to the grant notice,” no information on the funding amount can be provided either. “The issuance of the notice is currently being intensively prepared and is planned for the 4th quarter of 2021,” the ministry said. In earlier communications, the BMVi mentioned six of eleven projects being underway.

Tesla, in June, had amended the planning documents for Grünheide to include a battery cell production facility on-site. While not unusual for projects of that scope, the amendments are undergoing approval again which has proven difficult so far for the electric carmaker. In the third public approval procedure, 395 new objections were reportedly raised, bringing the total up to 809 and now requiring another public hearing.

Due to the difficulties, Tesla Model Y production is on hold at Giga Berlin, but the Californians remain positive to resume production before the year’s end as planned. Once running at capacity, the Tesla plant in Grünheide is to make about half a million electric cars a year.

tagesspiegel.de (in German)