Tesla chooses US over Germany for battery manufacturing

Tesla originally planned to build a 50 GWh battery factory at its site in Brandenburg, near Berlin, by the end of 2023. Those plans now appear to have changed, as the American manufacturer indicated that it would focus its battery production in the US. . The reason for that? The Inflationary Reduction Act (IRA) is Joe Biden’s plan to boost the US economy and make life more affordable for local people.

Small grants

One of the pillars of the IRA is additional investments in green energy, which should make America less dependent on fossil energy and the volatile prices that go with it. In particular, last year’s (relatively) high electricity and gasoline prices as a result of the Russian invasion of Ukraine and other geopolitical events were a thorn in the side of the American public.

Tesla qualifies for higher subsidies if it starts producing more batteries on American soil (up to $45 per kWh produced), which is why Elon Musk’s car company has decided to cut battery production in Berlin. Additionally, US buyers of EVs with US batteries also get a subsidy of up to $7,500. All in all, this represents a significant discount for the Tesla manufacturer and future buyers.

4680 cells finally ready?

Battery packs will still be made in Germany, but to a lesser extent, and battery components will still be made in Brandenburg. By the way, the batteries discussed here will be the long-awaited 4680 cells, which should be cheaper to manufacture and provide higher performance. However, its production has already accumulated significant delays, as the cells were already delivered in 2020.

On March 1, Tesla will hold its investor day, where it will reveal its plans for the future, including a new, lower-cost platform for smaller models. There may be talk of introducing mass production of these new battery cells, which will be structurally built into the car.