Tesla is reportedly trying to secure a new grant worth more than $100 million from the German government to support the construction of the Giga Berlin factory.
For all the previous Gigafactories, Tesla was able to secure some great support from the local government in exchange for the jobs it created and its own investment in the region.
Tesla receives important tax breaks from Nevada for Gigafactory 1, now known as Giga Nevada.
When it comes to Gigafactory 2, now Giga New York, it wasn’t Tesla’s deal since the company took over the factory as part of the SolarCity acquisition, but New York virtually paid for most of the factory, which it rents to Tesla for almost nothing as long as they stick to an investment and hiring schedule.
As for Giga Shanghai, Tesla received a lot of support from the local government and banks to not only finance the construction of the factory but also enable them to own it entirely, which is a first for an automaker in China.
Last year, CEO Elon Musk confirmed that Tesla is going to build Gigafactory 4 in the “Berlin area” – making it ‘Giga Berlin.’
The project will be located on a 300-hectare plot of land next to the GVZ Berlin-Ost Freienbrink industrial park.
Musk said that Tesla will build “batteries, powertrains, and vehicles, starting with Model Y” at Giga Berlin.
When the location for the new factory was announced, it wasn’t clear if Tesla was getting a deal from the government to help them build the factory there.
Last week, Peter Altmaier, economy minister, opened the door to possibly supporting Tesla financially in a vague comment to the media (via Reuters):
“In my conversations with (Tesla CEO) Elon Musk I have always made clear that there are no privileges but also no discrimination,”
Now we’ve learned that Tesla applied for a grant from the Brandenburg Investment Bank that could be worth “more than 100 million euros.”
Spiegel reported yesterday:
The US electric car manufacturer Tesla has submitted an application for funding for the construction of its factory in Grünheide near Berlin to the Investitionsbank Brandenburg (ILB). “The documents are now being successively completed,” said ILB CEO Tillmann Stenger. An investment plan is required for approval.
Tesla’s full investment in Giga Berlin hasn’t been disclosed yet, but the automaker is likely going to invest billions in order to complete the plant, which is supposed to produce hundreds of thousands of vehicles per year.
The automaker aims to start production in July of next year.
I know that the naysayers will be quick to shout that ‘Tesla can only survive because of government subsidies’, but the truth is that the fossil fuel industry is also only able to survive because of subsidies.
Either direct subsidies, in many cases, but also the incredible amount of subsidies by not pricing the incredible impact their production and use has on the environment and the health of many.
When you take that into account, the $100 million or whatever Tesla may get pales in comparison.
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