The chairman of the EU Parliament’s powerful trade committee, Bernd Lange (SPD), sees this as a “typical example” of the USA giving priority to its own interests and “offending its allies”. Brandenburg’s Economics Minister Jörg Steinbach (also SPD) even spoke in the “Tagesspiegel” of an “attack on the European market”.
The background to the Tesla decision is the Inflation Reduction Act recently signed by US President Joe Biden. The regulation is part of a large reform package that Biden’s Democrats passed in the summer after long internal quarrels. The new law throws social measures together with climate protection programs.
A carbon price is politically unenforceable in the US, so the US government is working with tax incentives. However, these are designed in such a way that they disadvantage providers from other regions of the world. Critics accuse President Joe Biden of wrapping the old “Buy American” dogma in a green robe.
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“We are clearly dealing with a discriminatory measure,” said the European politician Lange to the Handelsblatt. The Americans also seem to be aware of this, because they have excluded Mexico and Canada, but not the EU. “Therefore, there will now have to be talks with the Americans,” Lange clarified.
>> Read here: According to new US law: Tesla is temporarily stopping its battery factory in Grünheide
Specifically, the US government only wants to subsidize electric cars with a maximum tax rebate of 7,500 dollars if they are assembled in the USA. The batteries also have to be manufactured there for the most part. On Friday, Tesla confirmed its strategy shift towards partners in the Grünheide region, referring to the prospect of US subsidies.
The priority for battery production should now initially be in the USA. Accordingly, production at the plant in Austin (Texas) should be ramped up faster than planned. This can be supported from Germany with the delivery of parts and engineers. Ideally, both battery factories would be ramped up as soon as possible. The Wall Street Journal was the first to report on the realignment of the battery plans.
Electric cars have been manufactured in Grünheide since March. The construction of the battery factory is well advanced – but the timetable for an opening was unclear. Tesla boss Elon Musk also wanted to make the plant near Berlin the world’s largest battery factory, as he said in November 2020.
Brussels reserves the right to file a WTO complaint against the USA
Economics Minister Steinbach accused the US government of bringing American companies back into the country with “enormous subsidies”. The Greens economic politician Dieter Janecek sees it similarly. “The US government has spent a lot of money so that companies invest in battery factories and other green future technologies,” the member of the Bundestag told the Handelsblatt.
>> Read here: Tesla increases profits with higher prices – Grünheide produces 1000 cars per week
Janecek added: “The USA is trying to bring know-how and good jobs back into the country.” With regard to Tesla, he said that if the carmaker “really reconsiders its investment plans for a battery factory, we have to consistently investigate the possible reasons”. .
Steinbach demanded a reaction from the EU Commission. “The EU should put us in a position to be able to react differently to such developments, also in terms of state aid law, and thus restore equality with the USA,” said the SPD politician.
In Brussels, Biden’s climate protectionism has already been compared to the decades-long subsidy dispute between the American aircraft manufacturer Boeing and its European competitor Airbus.
The EU Commission reserves the right to sue the USA before the World Trade Organization (WTO). EU Economic Commissioner Valdis Dombrovskis said on Thursday at a meeting of G7 trade ministers in Neuhardenberg, Germany, that he had expressed his concerns in a meeting with US Trade Representative Katherine Tai.
The company set a production target of 500,000 electric cars per year.
(Photo: dpa)
Europeans and Americans actually wanted to overcome their trade conflicts. A year ago, Biden and EU Commission chief Ursula von der Leyen defused the dispute over punitive tariffs on European steel and aluminum that ex-President Donald Trump imposed. They had previously promised each other to freeze the dispute over state aid to Boeing and Airbus for five years.
FDP warns of “protectionist outbidding competition”
Instead of fighting each other, they want to face the challenge of China’s state capitalism together. In the transatlantic “Trade and Technology Council” TTC, the EU Commission and the US government want to coordinate their regulatory projects – actually. “Strong transatlantic ties and cooperation on trade, technology and security issues are more important than ever,” read the latest TTC statement in May.
Chancellor Olaf Scholz even hopes to win the USA over to an “international climate club”. At the end of June, the G7 states announced at their summit at Schloss Elmau: “We will work with partners to set up an open and cooperative international climate club by the end of 2022 in accordance with international rules.”
The Chancellor hopes to win the United States over to an “international climate club”.
(Photo: Reuters)
But the fact that the Americans went it alone in battery funding shows how difficult it will be to reconcile the different approaches to climate policy and forge a western economic alliance against China.
The concern in the Berlin traffic light coalition is correspondingly great that a dispute with the US government could be broken out because of Tesla’s new priorities in the production of batteries.
“With all current appeals to the EU level, it must be clear that the question of the location of the Tesla plant in Grünheide must not lead to a protectionist overbidding competition between the EU and the USA,” said the FDP economic politician Reinhard Houben to the Handelsblatt. “One should focus on fair competition and free trade among close political friends.”
The CDU economic politician Michael Grosse-Brömer showed understanding for the “Inflation Reduction Act”, which is intended to reduce economic dependency on China, for example. This goal “should be considered jointly by the USA and Europe,” said the chairman of the Economic Committee in the Bundestag to the Handelsblatt. “Protectionist measures within our transatlantic relationship are counterproductive.”
The car expert Ferdinand Dudenhöffer from the Duisburg Center Automotive Research (CAR) speaks of an “unfair preference” for battery factories in the USA. In Germany, Tesla’s focus on the US market is “significantly slowing down the development of the new car industry, the core of which is the battery,” Dudenhöffer told the Handelsblatt.
In the context of the skyrocketing energy prices, this means competitive disadvantages for German electric cars. “This brings a significant long-term weakening of the car location.”
More: German politicians are excited about plans for a Tesla battery factory in Brandenburg