The US Inflation Reduction Act leads Tesla to wind down battery manufacturing plans in Germany and instead shift focus to the US when it comes to manufacturing battery cells for electric vehicles, reports Reuters, among other media.

Reuters cites Tesla for saying that while the company has begun assembling batteries at the company’s German factory in Grünheide in the state of Brandenburg, Tesla reportedly plans to focus cell production in the US following the adoption of the IRA.

Moreover, Tesla informs of preparatory efforts on production of cell components, such as electrodes, in Germany, but that some of these will be shipped to the US.

As the name implies, the IRA is aimed at cooling inflation in the US, but also contains a number of tax incentives, which are meant to promote green investments. Altogether, the legislative package has a value of USD 369bn.

There have been some concerns in the EU that companies might move their production to the US on the heels of the IRA, which is why the EU Commission earlier in the year came up with a response resulting in easing of the union’s strict subsidies towards 2025.

A spokesperson from the German Ministry of Economic Affairs notes to Reuters Wednesday that work is underway on ”clearing up the reasons” for Tesla’s decision.

According to Brandenburg’s economy ministry’s information, Tesla’s change of focus allegedly won’t have an impact on the number of jobs at the German site.

(This article was supplied by our Danish sister media MobilityWatch)