Tesla rumoured to postpone battery production in Germany

Tesla is rumoured to have postponed its plans for battery production in Grünheide. Instead, corresponding projects in the USA are to be pushed ahead for the time being. According to media reports, the US government’s tax plans are behind the new battery strategy.

According to the Wall Street Journal, Tesla plans to use the resources earmarked for battery production in Grünheide first in the USA, where the Inflation Reduction Act has recently made high subsidies attractive. The sharp rise in energy prices in Europe as a result of the Russian attack on Ukraine is also said to play a role. According to the insiders quoted in the report, the project for Germany has been paused.

Tesla, according to the WSJ report, is already planning to transport ordered cell production machines to the US that were originally intended for use in the German factory. Tesla did not respond to a request for comment from Reuters news agency on the article, however, so the information has not been confirmed.

It is unclear how long the delay in battery production in Grünheide will last. Most recently, following an information event on the expansion of the Grünheide plant, it was speculated that battery production there would start in the first quarter of 2023. The building for battery production has already been erected and the interior work is currently underway. However, production machines have not yet been sighted in Grünheide.

Originally, the Model Y from Grünheide was to be built with the specially produced 4680 battery cells and structural battery packs from the start of production (after several delays in March 2022). As 4680 cells are not yet available on the market in sufficient quantities and in-house production was not yet running, all Model Ys (Performance and Long Range) in Grünheide are still built with battery packs supplied from China, using 2170 round cells in the conventional design.

The newly regulated EV tax credit, passed as part of the Inflation Reduction Act, provides a subsidy of up to 7,500 US dollars for the purchase of an electric car, provided that the batteries meet certain requirements regarding production and supply chains – these requirements are becoming increasingly strict over the years. In return, the previous cap of 200,000 vehicles has been removed, making Teslas eligible again. In addition, the IRA subsidises battery production at 35 dollars per kWh and module assembly from these cells at ten dollars.

In the USA, Tesla is already benefiting from the new regulation at Gigafactory 1 in Nevada (together with Panasonic), but also at the 4680 pilot production in Fremont and just now at the battery production in Austin, where the Gigafactory Texas there for the Model Y and the Semi electric truck is also to enter 4680 production. The German publication Teslamag even makes another speculation: “Now, however, the German Model Y is likely to be equipped with supplied batteries for a while. This actually contradicts Tesla’s strategy of having the shortest possible supply chains on the same continent. But purely financially, with the new subsidy even a 4680 production in the US with subsequent transport to Germany could be more worthwhile.”

With reporting by Sebastian Schaal, Germany.

wsj.com (Paywall), reuters.com, teslamag.de (in German)