Musk rejects government subsidies for planned Tesla battery plant in Germany

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A sign at a Tesla dealership in London on May 14.Matthew Childs / Reuters

Tesla on Friday said it withdrew its application for state aid for its planned battery factory near Berlin after CEO Elon Musk announced that the electric vehicle maker opposes all subsidies.

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In January the European Union approved a plan that included giving state aid to Tesla, BMW and others to support the production of electric vehicle batteries and help reduce imports from industry leader China.

Tesla was expected to receive €1.14-billion ($1.64-billion) in EU funding for its battery plant in Grünheide, Brandenburg state, under the plan, with a final decision likely by the end of the year.

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“Tesla has informed the Federal Ministry of Economics and the Brandenburg Ministry of Economics … important projects of common European interest,” a Tesla spokesperson said, referring to the European subsidies allocated to so-called ‘.

The spokesman said the construction plan of the plant would not be affected by this decision.

“It has always been Tesla’s view that all subsidies should be abolished,” Musk posted on Twitter in response to a tweet by another user when Tesla said it had withdrawn its funding application.

“But it must include huge subsidies for oil and gas. For some reason, governments don’t want to do that,” Mr. Musk said, deviating from the topic of factory grants.

According to estimates by the German economics ministry, Tesla itself is investing €5-billion ($7.21-billion) in the battery plant.

Meanwhile, construction of a car production site with a battery plant, which Tesla has begun construction under a pre-approval permit while it awaits final approval from the regional government, has made good progress over the past few weeks, according to the federal government. A government spokesman said.

According to the regional government website, the electric vehicle maker also applied for regional funding from Brandenburg in November 2020.

A spokesman for the Brandenburg Economics Ministry said the application has not been withdrawn.

The website says the amount Tesla applied for has not been disclosed, but investments in excess of €100 million ($144 million) are typically given 6.8 percent of their value.

The latest round of online consultations for the public to express environmental and other concerns about the car factory and battery plant kicked off last week and Tesla’s Mr Musk has said he is planning to formally start production by the end of the year. Let’s expect and then move on as fast as possible.

Mr Musk expressed his irritation for German laws and procedures in a letter to officials in April that the country’s complex planning requirements were contrary to the urgency needed to fight climate change.

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