Tesla's Possible 'U-Turn' to the US... Biden Says "Detroit Is Back"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Following the enactment of the United States' Inflation Reduction Act (IRA), the world's largest electric vehicle manufacturer Tesla has reportedly put on hold its plan to produce batteries in Germany and is considering relocating production to the U.S. U.S. President Joe Biden, who has shown a series of 'Made in America' initiatives, once again promoted American electric vehicle sales on the 14th (local time) by stating, "Detroit is back."

On this day, The Wall Street Journal (WSJ), citing multiple sources, reported that Tesla discussed moving battery manufacturing equipment, which was intended to be used at its Berlin factory in Germany, to the U.S. after reviewing eligibility for battery-related tax credits.

This discussion took place after the Inflation Reduction Act was enacted. The IRA stipulates that only electric vehicles using batteries produced in the U.S. and containing a certain percentage of components manufactured domestically, as well as critical minerals sourced accordingly, are eligible for subsidies of up to $7,500. Earlier, Tesla was also reported to be considering building a separate plant in Texas to refine lithium, a key battery material, following the enactment of the IRA.

WSJ commented, "Tesla's move shows how the new U.S. law is reshaping the electric vehicle industry," adding, "Tesla is changing its electric vehicle battery strategy due to tax credit benefits."

Tesla's consideration of relocating battery production is expected to be seen as a success amid President Biden's efforts to revive the domestic economy through supply chain restructuring ahead of the November midterm elections. At the '2022 North American International Auto Show' held in Detroit, Michigan, Biden said, "The great American roads will now be fully electrified."

He continued, saying that consumers can now purchase 'American-made' electric vehicles capable of long-distance driving and fast charging, emphasizing, "Electric vehicle charging stations will be as easy to find as gas stations." President Biden announced the approval of the first $900 million in funding to build electric vehicle charging stations in 35 states.

He also stated, "I believe we can own the future of the automotive market and manufacturing," adding, "American manufacturing is back, Detroit is back, and America is back." In particular, he praised labor unions such as the United Auto Workers (UAW), who supported him during the last presidential election, saying, "The middle class built America, and unions built the middle class."

President Biden took the wheel of General Motors (GM)'s first electric sports utility vehicle (SUV), the Cadillac Lyriq, and briefly drove it on the carpet while joking with reporters, "It's a beautiful car. Get in. I'll take you to Washington."

This content was produced with the assistance of AI translation services.