Tesla in Talks With Germany Over Possible Battery Factory

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  • Economy Minister expects Tesla to seek public funds for plant
  • German factory would open new front in competition with BMW

Tesla Motors Inc. is in discussions with the German government over the prospect of building a battery factory in the country, Economy Minister Sigmar Gabriel said Tuesday.

Tesla Chief Executive Officer Elon Musk has been in contact with German officials and may seek state support for the facility, Gabriel said at an event at a Mercedes-Benz car factory in Rastatt, Germany. Gabriel didn’t provide details about the proposed plant or timing of a decision.

“We’re in talks” with the Tesla CEO about a possible plant, Gabriel said. “I assume he will want public funds.”

A battery factory in Germany would open a new front in Tesla’s competition with luxury-car leader BMW AG and former shareholder and Mercedes parent Daimler AG, which makes batteries in Kamenz in eastern Germany and plans to expand production. A new plant would also be a sign of more aggressive expansion as Tesla prepares to open its Gigafactory, the massive battery plant currently under construction outside of Reno, Nevada. Tesla has said that Germany is a key market for its household battery-storage systems.

Tesla has “no current plans to build a battery factory in Germany,” Munich-based spokeswoman Kathrin Schira said in an e-mail, without commenting on talks with the government.