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Tesla opts for U.S. battery production, German battery plans take a backseat

Credit: Tesla Inc.

Tesla is reportedly prioritizing its plans to build batteries in the United States instead of Germany, as government incentives are more favorable in the U.S.

Tesla originally planned to build battery cells in Germany at Gigafactory Berlin to support electric vehicle production. The automaker had plans for 50 gigawatt hours of production annually when fully ramped, but now Tesla is reportedly switching up the plans as the United States is incentivizing domestic battery production.

Reuters said in its report that the Brandenburg Economy Ministry confirmed Tesla’s plans in a statement:

“Tesla has started its battery system production in Grünheide and is preparing to manufacture battery cell components. The company has prioritized further production steps in the USA because tax incentives make business conditions more favorable there.”

Tesla reportedly started battery production in Berlin last week, according to Economic Minister Jörg Steinbach. Steinbach said last week that Gigafactory Berlin was already “buzzing” with activity and already operational.

Tesla Giga Berlin battery plant starts initial operations: report

In October, the Biden Administration announced $2.8 billion in grants from the Bipartisan Infrastructure Law that aims to help manufacturing and processing companies. Additionally, President Biden announced the American Battery Materials Initiative, which wants to secure reliable and sustainable supplies of critical minerals used to build EVs.

Tesla has been attempting to ramp up 4680 production in the United States and had reached enough volume at the end of 2022 to support the manufacturing of 1,000 battery packs. While this is an impressive feat, Tesla is still working to continue the growth of the 4680 program and is building cells in Fremont, California.

Tesla will also build 4680 cells in Austin, Texas, at its Gigafactory Texas facility. Additionally, the automaker announced a $3.6 billion investment in Nevada, where it will expand the Tesla Gigafactory in Sparks.

In late January, Tesla said it would hire an additional 6,500 employees at the Gigafactory and had plans to produce 100 GWh of 4680 cells, which would be enough for 2 million vehicles annually.

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Tesla opts for U.S. battery production, German battery plans take a backseat
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