Tesla is slated to be on the receiving end of €1 billion in subsidies for Giga Berlin’s battery cell production. Business Insider noted this week that “several government sources” have said that Tesla will be granted the €1 billion in public subsidies for continuing to develop battery cells.
Although the factory isn’t completed, Germany’s Federal Ministry of Economics is awarding funds from its Important Projects of Common European Interest (IPCEI) to manufacturers to encourage domestic battery cell production. Last week, IPCEI announced 11 grants and Tesla was one of the manufacturers chosen.
The exact amount Tesla may receive hasn’t been formally announced.
The monies from the German government to support initiatives are often shared between the nation’s federal and state governments, The Motley Fool notes. The IPCEI program aims to help domestic companies, which makes Tesla receiving the grant a special exception — perhaps Germany knows what many critics often doubt: that Tesla is a leader in the industry and an ally to its own clean energy goals. Plus, Tesla is building a giant factory in Germany.
During Tesla’s Q4 earnings call last week, Elon Musk said that 2021 was going to be a great year for Tesla, which is something I’ve been saying also.
“I think it’s going to be a great year for Tesla. We’ve got a ton of — many great new products coming out. We’ve got factories that are advanced factories. … It will also make it easier how you’re having a factory in Berlin, one in Texas second, just from a logistics standpoint. Texas can help supply the eastern half of the US and Berlin can help supply Europe.
“… And I think the fundamental efficiency of the company will be much better with the factories. or at least having factories on each continent and having two factories in the US. So I’m super excited about the future.”
Zack Kirkhorn, Tesla’s Chief Financial Officer, noted that what Tesla is able to do now is something the company hasn’t had the opportunity to do before — build out capacity much more broadly and quickly.
“We can build that capacity with the expectation of what the end state of capacity will be pulling forward some of those investments, rather than incrementally adding capacity as we go along. And so this is an important part in terms of capital efficiency that we haven’t had the luxury to do in the past.”
In a nutshell, 2021 is expected to be an epic year for Tesla in terms of growth for all areas, ranging from expansion to profits. Tesla is now full steam ahead. Or full electricity ahead.