Elon Musk, Tesla CEO, on a stage at the Tesla Gigafactory in Grünheide, Germany.
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Tesla recently announced a strategy shift away from Europe as it seeks to benefit from unprecedented subsidies in the United States. But it’s not the only company reviewing investment decisions vis-à-vis Europe.
Many multinationals are reconsidering plans to deploy new money into Europe. It comes after U.S. President Joe Biden last year presented the Inflation Reduction Act, or the IRA, which includes a record $369 billion in spending on climate and energy policies.
The landmark legislation, which features green subsidies for businesses, has raised competition issues for European companies — and upset politicians in the region. Brussels has been left considering how best to respond.
Northvolt, a Swedish battery maker; Linde, a chemical giant from Germany; Volkswagen, the carmaker; Enel, the Italian energy giant, have all expressed an interest in profiting from U.S. subsidies. And there could be more.
“European companies, they prefer to have the present of the U.S. government rather than the penalty of the European authorities,” Evangelos Mytilineos, CEO and chairman at the Greek industrial conglomerate Mytilineos, told CNBC’s “Squawk Box Europe” about the additional bureaucracy in Europe.
When asked if he would be taking his business to the U.S., Mytilineos replied, “It is a possibility. Unfortunately, it is not just a possibility for our company.”
It is still early to assess just how much investment could drift away from Europe as a result of Biden’s policy. But so far the message from European businesses is clear: they want officials in the region to do more to support them.
In a speech in February, European Commission President Ursula von der Leyen said it was time for a “simpler and faster framework.” Previously, her team had welcomed the efforts stateside for a cleaner economy, while intensifying talks with their counterparts to…
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