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Tesla Withdraws $1 Billion Aid Request For Its Berlin Battery Plant

Tesla Inc (NASDAQ:TSLA) has never favored bureaucracy, and it has proved it once again by deciding to withdraw a funding request for the long-awaited Gigafactory in Berlin. Earlier in 2021,...

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This story originally appeared on ValueWalk

Tesla Inc (NASDAQ:TSLA) has never favored bureaucracy, and it has proved it once again by deciding to withdraw a funding request for the long-awaited Gigafactory in Berlin. Earlier in 2021, the European Commission had approved a public aid of 12,000 million euros to 42 companies, Tesla included.

ElasticComputeFarm / Pixabay - Valuewalk

 

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The money is intended to promote projects of battery cells for electric cars, and Tesla was entitled to $1.28 billion.

Tesla Wants No Help

Although the construction plans for the new German factory in Brandenburg remain unchanged, Tesla has decided to continue with its own financing.

A company spokesman said in a statement: "Tesla has informed the Federal Ministry of Economics and the Brandenburg Ministry of Economics that it is withdrawing its IPCEI request for state funding for the battery factory in Grünheide."

However, the famous electric car manufacturer has not withdrawn the request issued in late 2020 to the estate of Brandenburg for regional funds.

For now, Tesla, which has not explained the reason for this move, has invested 5,000 million euros in the battery and recycling plant that is currently building in Berlin, next to the Gigafactory.

Reasons Behind The Move

Some sources suggest that the decision to waive the aid is based on the fact that the company is already trying to manufacture the new 4680 batteries in Texas –and also, because Tesla is known for rejecting any governmental aid.

The truth is that the apathy that worker unions arouse in the Californian brand is keeping it away from government incentives, as it is the case in the U.S.

There, the Democratic Party proposed to grant a $4,500 subsidy at federal level for everyone purchasing an electric car. The only requirement is that it must be produced at a factory that allows worker unions, which is not Tesla’s case.

After many legal and social obstacles, Elon Musk hopes to start producing his electric cars in Germany by the end of the year. Something unlikely given that he still does not have the final permission.

Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.