Determination on Tesla’s estimated € 1 billion in German subsidies is predicted by the top of 2021

Germany is expected to decide by the end of the year how much government aid the US electric vehicle manufacturer Tesla will receive for its planned battery cell factory near Berlin, a spokesman for the Ministry of Economic Affairs said on Sunday.

The European Union approved a plan in January that includes Tesla, BMW and other state aid to support the production of electric vehicle batteries and to help the bloc reduce imports from industry leader China.

EU approval for the € 2.9 billion European battery innovation project, involving more than 40 companies, follows the launch of the European Battery Alliance in 2017 to help the industry move away from fossil fuels.

According to estimates by the Federal Ministry of Economics, Tesla wants to invest 5 billion euros in its battery cell factory in Grünheide near Berlin to supplement its almost complete electric car factory at the same location.

German bureaucracy blamed for delay

Due to the unusually high investment volume, the US automaker can count on German government subsidies of 1.14 billion euros, reported the Tagesspiegel on Sunday.

This coincides with a February report from Business Insider that Tesla will receive at least 1 billion euros in public funding from Germany to build its battery cell factory near Berlin.

The economy ministry spokesman said there was no final amount yet as talks are ongoing with the automaker and the European Commission, adding that a final decision is likely to be before the end of the year.

Tesla boss Elon Musk said last month he hoped the first cars could be built in the planned gigafactory in Grünheide in October or soon after.

Tesla has postponed the expected opening of the Gigafactory to the end of 2021 and blamed the German bureaucratic hurdles for it. Due to environmental concerns, the plant has also encountered local resistance.

Economy Minister Peter Altmaer said last Thursday that the car manufacturer Opel will receive a government grant of 437 million euros for its battery cell factory in Kaiserslautern as part of the broader European initiative to create its own battery industry.

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