Tesla's New Money Printing Machine
There is an indefinite postponement for the expansion of Germany's Giga Berlin factory from German officials. Why did this occur? Is there an incentive to slow down Tesla's progress? An indefinite postponement seems like a big deal for Tesla to continue to expand and sell its vehicles. For energy independence, Germany needs to stop slowing down Tesla's expansion.
Giga Berlin is up and running now, after a lengthy process. All EV makers are in a position where they are not able to meet the demand of customers. Nobody is able to keep up, not even Tesla. There are multiple issues, so creating any delay in EV production seems like a bad idea.
There is also an incentive for Tesla that will be worth billions just from building batteries in the U.S. It's going to equal thousands of dollars per battery pack for each EV.
Tesla's Battery Strategy
Tesla has shifted its battery strategy in the U.S. Tesla has paused plans to make battery cells in Germany. If Tesla does this in Germany, that is an economic boon for Germany. Tesla isn't doing this to stop Germany's growth, but is doing it because of the red tape to expansion in Germany.
Tesla is now making more batteries in U.S. as it looks to take advantage of the tax credits in the U.S. Equipment and manufacturing is now being moved to the U.S. temporarily. The qualifying of additional tax credits would benefit Tesla and make Tesla's EVs cheaper as well as making the cost of EV battery packs cheaper. It's a win-win for customers and for Tesla.
As long as the cells are packaged and made in the U.S., there is a tax credit that can be taken advantage of. Tesla is taking the opportunity by building a Lithium processing facility in the U.S., in Texas, and likely is going to build more.
Most of Tesla's batteries are purchased in China from CATL. The inflation induction act seeks to reduce the U.S. dependency on China. There is a $35 per kilowatt-hour credit for U.S.-made battery cells. This seems like over spending and is good for Tesla. This means thousands of dollars per vehicle produced.
Tesla is going to benefit enormously from this. Tesla is all of a sudden going to get thousands of dollars per battery pack made in the U.S. This seems like a no-brainer to do.
Will Tesla make billions for U.S. made batteries because of tax credits? Will Giga Berlin expand?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.