IRA Pays Off as Tesla Shifts Partial Battery Production Back to Us from Germany

Last August, US President Joe Biden signed the Inflation Reduction Act (IRA), worth a total of $750 billion, to provide varying subsidies based on output for producers involved in all aspects of electric vehicle battery production from 2022 to 2029. At the same time, a 30% of tax credit for investment in relevant equipment will be provided as well.

These incentives have stimulated many electric car companies to locate their production in the US, including Tesla.

The Ministry for Economic Affairs of Brandenburg, Germany said on February 21 that Tesla has suspended its whole plans to produce batteries in Brandenburg and will instead move part of the production procedures to the US, where the company will enjoy more favourable tax credit.

Tesla initially planned to produce the batteries at its plant in Gruenheide, Germany, with a peak annual capacity of more than 500 GWh.