Electric vehicle (EV) maker Tesla is changing its battery strategy to take advantage of US tax breaks and is suspending plans to make battery cells in Germany, according to media reports.
The Wall Street Journal reported that Tesla has discussed moving equipment used to make cells to the US. They were originally intended for use in the German factory.
The Inflation Reduction Act, which president Joe Biden signed last month, provides tax breaks to EV makers that source batteries from within the US.
Tesla has been contacted for comment.
The law gives some buyers a $7,500 tax credit if they purchase EVs whose batteries meet certain sourcing requirements.
The company is looking to ramp up production of its EVs at its new factories in Berlin, Germany, and Austin, Texas, to meet rising demand.
US Trade Representative Katherine Tai met with European Union Commissioner for Trade Valdis Dombrovskis, in Germany on Wednesday. The two have agreed to continue discussions about US EV tax credits that have upset EU officials.
