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Tesla speaks out against state aid to German battery plant as Musk opposes subsidies

A view shows the entrance to the construction site of the future Tesla Gigafactory in Gruenheide near Berlin, Germany, August 12, 2021. REUTERS/Hannibal Hanschke/File Photo

BERLIN, Nov.26 (Reuters) – Tesla (TSLA.O) on Friday said it had withdrawn its request for state aid for its battery plant project near Berlin, CEO Elon Musk saying the vehicle maker Electric opposed all subsidies.

The European Union approved a plan in January that included granting state aid to Tesla, BMW (BMWG.DE) and others to support the production of electric vehicle batteries and help the bloc reduce imports from the industry leader, China.

Tesla is set to receive € 1.14 billion ($ 1.28 billion) in EU funding for its battery plant in Gruenheide, Brandenburg as part of the plan, with a final decision likely by now the end of the year.

“Tesla informed the Federal Ministry of Economics and the Ministry of Economics of Brandenburg… Important projects of common European interest”.

Construction plans for the plant would not be affected by the decision, the spokesperson said.

“Tesla has always believed that all subsidies should be eliminated”, Musk posted on Twitter in response to a tweet from another user after Tesla said it withdrew its funding request.

“But that has to include the massive oil and gas subsidies. For some reason, governments don’t want to do this…” Musk added, stepping aside from the subject of the subsidy at the plant.

Tesla itself is investing 5 billion euros in the battery plant, according to estimates by the German Ministry of the Economy.

Meanwhile, the construction of an automobile production site next to the battery plant, which Tesla has started building with pre-approval permits pending final approval from the regional government, has progressed well in recent times. weeks, said a spokesman for the Federal Economy Ministry. noted.

The electric vehicle maker also applied for regional funding from Brandenburg in November 2020, according to the regional government website.

A spokesperson for the Brandenburg Economics Ministry said the request had not been withdrawn.

It is not disclosed how much Tesla is asking for, but investments worth more than $ 100 million typically receive 6.8% of their value, the website says.

The latest round of online consultations for the public to voice environmental and other concerns about the auto plant and battery plant closed last week and Tesla CEO Elon Musk has said he officially hopes start production by the end of the year, then increase as quickly as possible.

Musk has made known his irritation with German laws and processes, saying in a letter to authorities in April that the country’s complex planning requirements conflicted with the urgency needed to tackle climate change. Read more

($ 1 = 0.8876 euros)

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