Tesla will not be making battery cells in a German factory for the time being

Tesla has changed its plan to make battery cells in Germany. Instead, those battery cells are made in the United States, due to favorable subsidies in that country. Battery parts are still made and batteries are assembled in Germany.

The automaker has moved battery cell production to the United States because of subsidies from the Inflation Reduction Act, a spokesperson said against Reuters, among others. Tesla initially had plans to produce 4680 cells in Grünheide, near Berlin. At the end of 2021, it turned out that Tesla had missed out on more than a billion euros in subsidies due to delays in the construction of this factory.

The company will still assemble batteries in Grünheide, for which it will use battery cells made in the United States. In addition, the manufacturer wants to produce parts such as electrodes in the German battery factory. Part of this is then sent to the United States.

Tesla previously said it wanted to produce 50GWh of batteries annually with the battery factory in Grünheide. According to a minister of the German state of Brandenburg, where Grünheide is located, Tesla’s decision would have no consequences for the number of employees at the factory. The battery factory is located near Tesla’s German car factory.

The company does not seem to rule out making battery cells in Germany later, but is now shifting its priorities to the United States due to the additional subsidies that the American government is currently offering. American consumers who purchase electric cars with batteries from the US also receive additional subsidies. The 4680 cells that Tesla will produce offer more battery capacity at lower costs.

Tesla 4680 battery cell