A little production, but not as much as originally planned: This is how the strategy of the American electric car manufacturer Tesla can be summarized for its battery factory in Grünheide, Brandenburg. Already in the late summer of last year, it had become apparent that Tesla could slow down its expansion plans in Germany because of the American subsidy program "Inflation Reduction Act" (IRA).

Julia Löhr

Business correspondent in Berlin.

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On Wednesday, a spokeswoman for the company clarified: Tesla had begun in Grünheide with the assembly of battery systems, and for individual components such as electrodes, the production preparations were running. However, the focus of battery cell production is therefore not in Grünheide.

Plans changed

"The IRA's tax breaks have influenced our original plans to focus cell manufacturing on manufacturing facilities in the U.S.," the spokeswoman said. "However, Grünheide is supporting the ramp-up and expansion of production in the USA." Individual components of cell production, such as electrodes, are produced in Germany and then shipped to the USA.

Tesla CEO Elon Musk officially opened the company's first car factory on European soil on March 22 last year. Both Chancellor Olaf Scholz (SPD) and Economics Minister Robert Habeck (Greens) came from federal politics. The fact that Tesla was only able to start production a little more than two years after submitting the building application is often cited in Berlin as proof that Germany is less bureaucratic than its reputation. The hopes that rested on Tesla's second project in Grünheide were correspondingly high: The production of battery cells in Germany is a declared industrial policy goal to secure jobs.

The state Ministry of Economics of Jörg Steinbach (SPD) had triggered unrest on Tuesday with a statement on Tesla. "The company has prioritized further production steps in the U.S. because the tax environment there is more favorable," it said. This had been interpreted as the beginning of the end of battery production in Germany. A spokeswoman for the ministry stressed the next day that it had never been said that Tesla had abandoned plans to produce entire batteries. "The Grünheide site, including battery cell production, will remain under construction and with its jobs."

How many employees currently work for Tesla in Grünheide, there are different information. In local newspapers there is talk of up to 8500. In its plans, Tesla had once named 12,000, but at that time there was no talk of setting up battery production. Most recently, Tesla drew resentment from the authorities because the company began construction work on a parking lot covered with solar panels on its site without obtaining a permit.