Symbels Resumes

Tesla is not the only company reviewing its Europe investment after Biden's IRA

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.

Europe needs to step up its game.

Miguel Stillwell D ‘Andrade


“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.

“Europe needs to step up its game,” Miguel Stillwell D ‘Andrade, CEO of energy giant EDP, told CNBC’s Squawk Box Europe Friday. He described the IRA as an “extremely powerful, simple pro-business investment tool.”

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 ensure European businesses would not flock to America.

But there are fears it could be too little, too late.

Europe lags U.S. in terms of encouraging companies to become more sustainable: Evangelos Mytilineos

Peter Carlsson, the CEO of Northvolt, told CNBC in February that his company has been working on a North American plant. “And with the IRA that plan kind [of] got turbo boosted given the very strong incentives,” he added.

Northvolt is in the midst of deciding whether to press ahead with its expansion in North America before doing so in Germany.

Meanwhile, Ilham Kadri, CEO of Solvay, a chemicals company headquartered in Belgium, said in January: “The reality is that the Biden administration incentivizes when Europe regulates — to put it black in white.”

EU ‘aware that it needs to do more’

Solvay CEO: Europe needs to be inspired by Biden's IRA legislation
Northvolt CEO: Still committed to German plant


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