Tesla decides against state aid for German plant as Musk opposes subsidies

Withdraws plea for state aid in Germany

Tesla said on Friday it has withdrawn its application for state aid for its planned battery factory near Berlin as CEO Elon Musk declared the electric vehicle maker opposed all subsidies.

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 ($1.28 billion) in EU funding for its battery plant in Gruenheide, Brandenburg under the plan, with a final decision likely by the end of the year.

"Tesla has informed the Federal Ministry of Economics and the Brandenburg Ministry of Economics... it is withdrawing its IPCEI application for state funding for the battery factory in Grünheide,” a Tesla spokesperson said, referring to European subsidies allocated to so-called ‘Important Projects of Common European Interest’.

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

“It has always been Tesla’s view that all subsidies should be eliminated,” Musk posted on Twitter in response to a tweet by another user after Tesla said it had withdrawn its funding application.