Tesla withdrew state funding application for German battery factory

Tesla has withdrawn its application for state funding for its planned battery plant in Brandenburg, just outside Berlin, a spokesperson for the economy ministry said on Friday.

"Tesla continues to stick to its plans for the battery factory in the Gigafactory Berlin-Brandenburg, but will do without state IPCEI funding," the spokesperson said, referring to European subsidies allocated to so-called 'Important Projects of Common European Interest'.Tesla was not immediately available for comment.

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

Tesla was expected to receive 1.14 billion euros ($1.28 billion) in EU funding under the plan, with a final decision likely by the end of the year. The electric vehicle maker also applied in November 2020 for regional funding from Brandenburg, according to the regional government's website.

A Brandenburg economy ministry spokesperson said this application had not been withdrawn. The amount Tesla applied for is undisclosed, but investments worth over 100 million euros are generally given 6.8% of their value, the site says. The company is itself investing 5 billion euros in the battery plant, according to economy ministry estimates.

Construction at the factory site, where Tesla has begun building under pre-approval permits while it awaits final approval from the regional government, has made good progress in the last few weeks, the spokesperson said.

The latest round of online consultations for the public to express concerns towards the site closed last week and Musk has said he hopes to formally begin production by the end of the year.

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