Tesla Motors (NASDAQ: TSLA) is about to receive unexpected good luck from the German government. According to a Business Insider report published on Monday and citing “several government sources”, the electric vehicle (EV) specialist will receive at least 1 billion euros ($ 1.2 billion) in public subsidies to continue developing battery cells.
Tesla is currently building a factory, located near the national capital, Berlin, to manufacture these components.
The Federal Ministry of Economy of Germany is encouraging the production of battery cells in the country, granting funds from its Important Projects of Common European Interest (IPCEI) to manufacturers. Last week, it announced 11 grants from the initiative; Tesla was one of the winners.
Image source: Tesla Motors.
The exact amount of Tesla grants has not yet been formally announced, and Business Insider quoted a ministry spokeswoman as saying that there is no general formula for determining them. One factor for this is that the money from government support initiatives is often shared between the federal and state governments in Germany.
However, the magazine’s sources say Tesla’s funding will be “in the billions of single digits” of euros.
Like many large-scale government initiatives in Germany, the IPCEI program aims to help national companies, so it is somewhat unusual for Tesla, based in the United States, to be part of it. The government may be eager to keep the high-profile company that makes products in the country by supplying this sweetener.
Tesla shares had a great day on Monday. It rose 5.8%, exceeding the 1.6% increase in S&P 500 index.