Paul van Gerven
23 February 2023

Tesla has begun assembling batteries at its Brandenburg plant but will shift cell production to the US to benefit from a recently launched tax incentive scheme. “The focus of Tesla’s cell production is currently in the United States due to the framework created by the United States Inflation Reduction Act (IRA),” the company told Reuters. The German government said it’s looking into the matter.

Tesla factory Berlin
Credit: Tesla

The carmaker’s move likely strengthens the concerns of European politicians, who fear the IRA has Europe playing catch-up in developing sustainable industries. The legislation introduced last year by the Biden administration includes 369 billion dollars on climate and energy policies and comes with tax credits for consumers who buy electric cars that were made in the US. The incentives for a Tesla are worth up to 7,500 dollars.

Ironically, perhaps, Germany is among the member states opposing increased public spending by the EU to prevent green businesses from moving to the US.