Woidke meets Tesla managers in the USA

Tesla Gigafactory Berlin-Brandenburg

The company set a production target of 500,000 electric cars per year.

(Photo: dpa)

Berlin The US electric car manufacturer Tesla has the Brandenburg prime minister Dietmar Woidke (SPD) assures that the battery factory planned in Grünheide near Berlin for its own cell production will not be canceled.

In Washington, Woidke had “high-ranking representatives of Tesla hit,” government spokesman Florian Engels told Handelsblatt. During the "very constructive discussion" it was explained that the factory in Grünheide would be further expanded.

Woidke and State Minister of Economics Jörg Steinbach (SPD) have been in contact since Sunday United States and advertise there for Brandenburg as an industrial location until Friday. Steinbach wrote on Twitter that Tesla's involvement in Grünheide remains unchanged, especially with regard to expansion plans for automobile production. "The battery factory is being completed," says Steinbach. "Internal process modifications and prioritization" are still pending. "But the factory is coming."

A recent report by the Wall Street Journal caused a stir, according to which Tesla wants to change its battery strategy in order to benefit from new multi-billion dollar tax incentives in the USA.

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Tesla confirmed the change in strategy towards partners in the Grünheide region and referred to the prospect of US subsidies. However, nothing was to change in the construction plans for the battery factory in Grünheide.

Effects of US Law

Above all, the new US subsidies for electric car purchases, which are intended to further boost demand for such vehicles, met with criticism. The chairman of the EU Parliament's powerful trade committee, Bernd Lange (SPD), saw this as a "typical example" of the USA giving priority to its own interests and "offending allies". Brandenburg's Economics Minister Steinbach even spoke in the "Tagesspiegel" of an "attack on the European market".

The background is that of the US President Joe Biden recently signed “Inflation Reduction Act”. The regulation is part of a large reform package that Biden's Democrats passed in the summer after long internal quarrels.

A particularly large part of the package concerns the promotion of renewable energies, which also includes the subsidization of electric cars. The measures will come into force on January 1, 2023 and will apply until 2032. With the new law, the US government only wants to subsidize electric cars with a maximum tax rebate of 7,500 dollars if they are assembled in the USA. The batteries also have to be manufactured there for the most part.

Tesla then explained with a view to the Grünheide location that the priority for battery production should now be in the USA. Accordingly, production at the plant in Austin (Texas) should be ramped up faster than planned. This can be supported from Germany with the delivery of parts and engineers. Ideally, both battery factories would be ramped up as soon as possible.

Electric cars have been manufactured in Grünheide since March. The construction of the battery factory is well advanced - but the timetable for an opening was unclear. Tesla boss Elon Musk also wanted to make the plant near Berlin the world's largest battery factory, as he said in November 2020.

Battery factory of the Tesla Gigafactory Berlin-Brandenburg

Electric cars have been manufactured in Grünheide since March.

(Photo: dpa)

Lower Saxony's Economics Minister Bernd Althusmann (CDU) is also critical of the possible effects of the new US law. He thinks it is right against the background of the law WTO- Check rules. "This should be done vigorously to protect the German and European economy," Althusmann told the Handelsblatt.

>> Read here: USA instead of Grünheide – Tesla's new battery strategy alarms German politicians

The fact behind this is probably that Volkswagen has its headquarters in Wolfsburg, Lower Saxony. There the group wants to build its new plant for the future central electric model Trinity.

"Make a European location more attractive for productions"

The EU Commission reserves the right to sue the USA before the World Trade Organization (WTO). EU Economic Commissioner Valdis Dombrovskis recently said on the sidelines of a meeting of G7 trade ministers in Neuhardenberg, Germany, that he had expressed his concerns in a meeting with US Trade Representative Katherine Tai.

Dietmar Woidke

In the US, Woidke had a "very constructive conversation" with Tesla managers.

(Photo: imago images/Political Moments)

Tai explained in an interview with the Handelsblatt that the United States had heard the criticism from its trading partners. Discussions with Dombrovskis on the US EV tax credit would continue. "We always want to have an open line of communication with our allies." Tai did not indicate any compromises.

>> Read also: Rejection of Lindner - US Trade Representative against new free trade agreement

Althusmann pointed out that functioning battery production requires a secure location, cheap energy, sources of raw materials and secure supply chains. This is also a “massive” problem in the USA at the moment. The EU Commission must therefore "do everything possible to make the European location more attractive for productions".

Brussels is already promoting efforts for battery production in the EU with the “Fit for 55” program. Over 20 billion euros have already been approved in programs with common European interests (IPCEI). "Financial support is by no means everything," emphasized the minister. "We therefore need an energy price cap and more intensive foreign trade activities in important supply countries."

More: German politicians are excited about plans for a Tesla battery factory in Brandenburg

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