Elon Musk, who recently became the world’s first trillionaire largely due to the stock market performance of SpaceX, has seen his business interests in Germany bolstered by significant state support. According to internal documents obtained by EUobserver, Germany directed €860 million in subsidies toward Tesla owners to help satisfy green energy targets linked to its post-pandemic recovery package. These incentives effectively made Tesla purchasers a component of the conditions required for the federal government to unlock EU Covid bailout funds.
Beyond buyer incentives, Tesla’s gigafactory in Berlin is now receiving over €71 million in direct state aid. This funding follows the European Commission’s approval under a framework designed for crisis and transformation during the Ukraine war. Specifically, the state of Brandenburg has begun issuing the first of three €24 million installments to the Grünheide battery facility.
This financial support arrives despite Musk’s complex history with public funding. In 2021, he famously declined €1.14 billion in federal and state aid under the EU’s IPCEI Batteries framework for a battery-cell production facility near Grünheide, some 30km from Berlin, citing a belief that all subsidies should be eliminated. At the time, Tesla rejected the funds due to strict “first industrial deployment” requirements, preferring US production-based tax credits with fewer conditions. Despite that stance, the Berlin Gigafactory now accepts German taxpayer funds as it produces Model Y vehicles.
The investigation into these subsidies coincides with heightened tensions between Musk and the European Union. Musk has openly supported the neo-fascist Alternative for Germany (AfD) party and has labeled the EU a “civilisational threat.” Following a €120 million fine levied against his platform, X, for violating digital rules, Musk stated on December 6, 2025, that the EU should be abolished and compared its institutions to the “Fourth Reich.”
Critics, including the US-based Centre for Countering Digital Hate, have accused Musk of using his platform to promote white supremacists and misogynists. The non-profit also alleged that Musk fueled violence in Belfast following a stabbing incident involving an asylum seeker. These controversies highlight the friction between Musk’s political rhetoric and his ongoing receipt of state-backed financial support in Europe.
However, the funds came with “first industrial deployment” restrictions, forcing Tesla to turn it down, while the US offered large, production-based tax credits with fewer strings attached.
