Skip to main content

[Update] Elon Musk Clarifies Why Tesla Decided To Forgo EU Incentive For Giga Berlin’s Battery Plant

Elon Musk says lessons he learned from a previous $465 million Department of Energy loan is the reason why Tesla decided to forgo a 1.5 billion euros EU incentive for the Giga Berlin battery plant.

In our previous article, we discussed why Tesla decided to forgo a $1.5 billion dollar EU incentive for the battery plant currently under construction in Giga Berlin. We also extensively cover the stipulations the EU attached to the incentive that forced Tesla to basically reject free money.

And within a few hours of us learning Tesla’s decision, Elon Musk has weighed in on the matter. Below you can read Tesla’s detailed Giga Berlin roadmap, 4680 cell rundown, and refreshed Giga Berlin Model Y details.

If you’re already familiar with the ins and outs of Tesla’s Giga Berlin plans, you can skip ahead to the section titled Elon Musk’s response.

Tesla Giga Berlin & Refreshed Model Y

Tesla is currently building a new battery factory in Grünheide, Germany. Construction of the battery plant is taking place in the Giga Berlin premises and when complete will produce Tesla’s newest 4680 cells.

According to Tesla, the 4680 batteries contain several manufacturing, design, and cell chemistry breakthroughs giving the new batteries a 54% increase in energy density and a 69% reduction in capital expenditure per kilowatt-hour.

The 4680 cells are initially expected to go into the refreshed Model Y that will be produced in Giga Berlin and Giga Texas. According to Tesla, the refreshed Model Y with the 4680 cells and new architecture will begin deliveries in early 2022.

Related news: Cybertruck's Clone: China's EF-1-T Bears a Striking Resemblance to Tesla Cybertruck

Based on Musk’s previous statements, we expect the refreshed Model Y to have a 475-mile range, overall improved design, and a new paint scheme with added colors that subtly change with curvature.

One crucial step to achieve volume production of the refreshed Model Y is the Giga Berlin battery plant. The construction of the battery factory is currently progressing rapidly.

Elon Musk’s Response

Tesla is attempting to bring several technological breakthroughs to mass production for the first time in Giga Berlin. Given the magnitude of the challenge, Tesla will undoubtedly be happy to receive any assistance it could get.

However, with the recent decision to pass up on the $1.5 billion incentive, Elon Musk has shown he still remains focused on Tesla’s stated goal, which is, accelerating the advent of sustainable energy.

According to Musk, Tesla decided to not take the money because the terms of the incentive were so onerous that they made the potential benefit not worth it. Musk drew parallels with the $465 million Department of Energy loan Tesla received from the US government back in 2010.

At the time, the loan made Tesla the target of politically motivated attacks. Tesla’s name was even mentioned in one of the presidential debates as evidence of President Obama’s lack of judgment when giving out taxpayer dollars to electric startups.

Related news: Alpha Speed Lucid Air Hits 235 MPH In Testing

And now Musk says the lesson Tesla learned from the Department of Energy loans is the reason why Musk and team have decided to forgo the 1.5 billion Euros for the Giga Berlin battery plant.

In his Tweet, Musk did not mention the exact preconditions that forced Tesla to pass up on the incentive. However, a report from Germany points to one specific clause as to why Tesla was unable to agree to the terms.

The EU precondition demands, in order for Tesla to receive the incentive, the EV maker should agree that it can not start mass production of the new 4680 cells anywhere before Giga Berlin. This on its own wouldn’t have been an issue however, Giga Berlin’s delay due to bureaucratic red tape has meant Tesla has moved initial mass production of the 4680 cells to Giga Texas.

It’s not yet clear if Tesla’s decision will put the EV maker at a disadvantage, but we will be sure to keep you posted if we learn more about the issue. Make sure to visit our site for the latest information.

So what do you think? Is Tesla right for not taking the EU incentive? Do you think this decision will put the company at a disadvantage? Let me know your thoughts down in the comments below.

For more information check out: Tesla Model Y Performance Released in China Also, see Legacy Auto-Playing Checkers, Tesla, and Chinese Playing Chess

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.


Pedro Rodrigues (not verified)    November 30, 2021 - 12:43PM

Is it right to tax me to give the moeny to Tesla while I can't save enough to afford a Tesla. I think its theft of the EU citizen to give to corporations, the very definition of facism. Musk did right thing here, he just does not understand it has beeing fascist but he understands the consequences. Nothing is free in life, Musk got the money from DoE and payed the full price for it. He learned his lesson and is not accepting bride stolen money. I think that is the moral move.