By Michael Elkins
According to an exclusive report by the Wall Street Journal today, electric vehicle giant, Tesla (NASDAQ:TSLA) has decided to put a pause on the company’s plans to make battery cells in Germany. The electric vehicle giant has been working to produce its own batteries and has discussed shipping equipment intended for use in Berlin to the U.S. for domestic use.
According to the report, citing people familiar with the matter, Tesla is looking at qualifying for U.S. electric vehicle and battery manufacturing tax credits under the Inflation Reduction Act. Making more batteries domestically could help Tesla qualify for the tax breaks. The law provides production tax credits as well as a $7,500 credit to buyers of certain electric vehicles whose batteries meet various sourcing requirements.
Sham Kunjur, General Motors (NYSE:GM) executive director for EV raw materials, said discussions with outside companies to build out a U.S. battery supply chain have heated up since the law took effect.
“Our thought process was that we would do this over a period of time, but with the IRA, we are actively working on figuring out how to accelerate,” he said. GM in the past year has invested in companies and struck long-term deals to secure future supplies of lithium, cobalt and other battery materials.
In the days after the bill became law, the company told Texas officials that it was scouting regional sites for a factory that would refine lithium, a key battery input that today is mostly processed in China.
According to Bernstein Research, if Tesla is able to qualify for all production credits, a 75 kilowatt-hour battery pack such as those used in the long-range version of Tesla’s Model Y compact sport-utility vehicle could see its cost drop by nearly 40%.
Tesla and one of its cell suppliers, Panasonic Holdings Corp. (OTC:PCRFY), share a Nevada battery factory and are likely to be among the biggest early beneficiaries of those battery production incentives, analysts said.
Shares of TSLA soared 3.17% to $301.39 per share at the time of this report, Wednesday.