Tesla Inc is to forgo 1.14 billion euros (US$1.3 billion) of state aid for a factory that it is building in Germany because it has first decided to try to produce a new type of battery cell at scale in Texas, a person familiar with the matter said.
The US automaker has been working on so-called “4680” battery cells at a site near its auto plant in Fremont, California.
Tesla CEO Elon Musk last year said that after the firm proved it could make them on a pilot assembly line in Texas, it would manufacture them at scale at the factory that it has been constructing outside Berlin.
This made Tesla eligible to receive public funds from Germany as part of the EU’s Important Project of Common European Interest initiative, which backs first industrial deployments of battery projects in member states.
As Tesla has shifted gears and is further along producing 4680 cells at its factory under construction in Austin, Texas, it is no longer eligible for the money, the person said on condition of anonymity.
Tesla informed German authorities that it would not use the support package, German Ministry of Economics and Technology spokeswoman Beate Baron said earlier on Friday, without specifying a reason for the decision.
“It has always been Tesla’s view that all subsidies should be eliminated, but that must include the massive subsidies for oil & gas,” Musk wrote on Twitter after the ministry’s announcement. “For some reason, governments don’t want to do that...”
Musk, who also runs rocket maker Space Exploration Technologies Corp (SpaceX), has bristled for years at detractors faulting him for taking advantage of government support. Examples of this include the US loan that helped Tesla get the Model S sedan into production, which the company paid back early.
After his initial Twitter post, Musk revisited a three-and-a-half-year-old exchange with another user who criticized Tesla and SpaceX’s use of subsidies.
“Combined Tesla+SpaceX market cap is now over US$1.2T [trillion],” wrote Musk, who then took issue again with a figure mentioned in a May 2018 Twitter thread.
Tesla shares on Friday fell 3.1 percent in New York trading.
Tesla has almost completed construction of an electric vehicle factory in the town of Gruenheide, southeast of the German capital, and also plans to manufacture battery cells at the site.
While Musk wants to start assembling Tesla Model Ys in Gruenheide before the end of the year, local authorities still have not granted final approval for the project.
The German ministry has estimated that Tesla is investing about 5 billion euros in Gruenheide.
DISMAL OUTLOOK: A Citigroup analyst predicted firms face ‘the worst semiconductor downturn in at least a decade,’ due to inventory build and the potential of a recession Semiconductor stocks tumbled after Micron Technology Inc became the latest chipmaker to warn about slowing demand, triggering concern that the industry is heading into a painful downturn. In the US on Tuesday, the Philadelphia semiconductor index sank 4.6 percent, with all 30 members in the red, its biggest drop in about two months. In Asia, chip stocks from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to Samsung Electronics Co, SK Hynix Inc and Tokyo Electron Ltd slumped. Investors are growing increasingly skittish as the notoriously cyclical industry is hurtling toward a prolonged slump after years of widespread shortages that led to heavy
With a tantalizing array of satay chicken, wok-fried mud crab and chilled tiger prawns, the dinner buffet at Singapore’s Grand Hyatt hotel typically sets diners back about US$70. Those on a tighter budget and with an eye on sustainability can fill a box for one-tenth of that price. Across Asia, tech start-ups are taking food otherwise destined for landfill and providing discounted meals through mobile phone apps. About one-third of food is lost or wasted every year globally, and the mountains of waste are estimated to cause 8 to 10 percent of greenhouse gas emissions such as methane, the UN says.
MAJOR REVENUE CONTRIBUTOR: The company said that it expects revenue this year to increase annually due to an improved smart consumer electronics outlook Hon Hai Precision Industry Co (鴻海精密) yesterday said revenue this quarter would be flat from last quarter, despite new phone models launched by key customers, as the market faces weakening demand. The iPhone assembler, based in New Taipei City’s Tucheng District (土城), said it is cautious about its business outlook, given mounting uncertainty regarding geopolitical tensions, soaring inflation and COVID-19 flare-ups, but still expects revenue this quarter to be higher than the NT$1.4 trillion (US$46.67 billion) it reported a year earlier. The forecast came as the company posted record second-quarter net profit of NT$33.29 billion, up 12 percent year-on-year from NT$29.78 billion.
Yageo Corp (國巨) yesterday said that its revenue would drop by a low single-digit percentage this quarter from a historical high last quarter, as customers and distributors are holding back demand to concentrate on inventory digestion due to flagging smartphone and notebook computer demand. The world’s biggest supplier of passive components expects to take three to six months to reduce its inventory of commoditized passive components to a normal level of 100 to 110 days, from 130 days currently. Yageo would reduce its factory utilization rate for standard passive components to about 60 percent this quarter, from about 70 percent last quarter,
RSS