Between 2020 and 2023, Germany spent €860m subsidising the purchase of Teslas — a scheme that helped unlock Berlin’s share of the EU’s Covid recovery fund, according to internal documents obtained by EUobserver. Now, Elon Musk’s Berlin gigafactory is also receiving more than €71m in state aid.
Nikolaj Nielsen
Elon Musk’s wealth soared to stratospheric levels last month after he became the world’s first trillionaire, primarily driven by SpaceX’s stock market launch.
At the same time, €860m subsidies for Tesla owners helped Germany tap EU Covid money, while Musk’s gigafactory in Berlin is now receiving over €71m in state aid, according to internal documents obtained by EUobserver.
An investigation by EUobserver sought to trace to what extent, if any, the EU’s post-pandemic Covid bailout funds were directed towards Tesla in Germany, where Musk openly supports the neo-fascist Alternative for Germany (AfD) – while declaring the EU a civilisational threat – views shared by Donald Trump and Russia’s president, Vladimir Putin.
Elon Musk making his Nazi salute at a Donald Trump rally, January 2025Between 2020 and 2023, nearly €860m of German subsidies went to Tesla buyers in Germany, under a programme that helped unlock the country’s EU Covid refinancing efforts.
Germany relied on an EV-subsidy programme to help satisfy green targets tied to its post-pandemic recovery package, which meant Tesla purchasers were indirectly part of the conditions for unlocking EU recovery funds for the federal government.
Even so, Musk last December, in an online rant after breaking EU digital rules, said that “the EU should be abolished” while comparing its institutions to the “Fourth Reich”, in reference to Nazi Germany, for having fined his social media platform X some €120m.
The EU should be abolished and sovereignty returned to individual countries, so that governments can better represent their people
— Elon Musk (@elonmusk) December 6, 2025
X is being used as a springboard for white supremacists, misogynists and dangerous conspiracy theories, says the US-based Centre for Countering Digital Hate, a non-profit, which has accused Musk of fuelling violence in Belfast after a brutal stabbing blamed on an asylum seeker.
He also famously said it was Tesla’s belief that all subsidies, including for oil and gas, should be eliminated after turning down €1.14bn in federal and Brandenburg state aid under the EU’s IPCEI Batteries framework in 2021 for a battery-cell production facility near Grünheide, some 30km from Berlin.
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.
“For a company like Tesla, that is probably much more attractive,” says Lucas Carvalho, at the Berlin-based Bertelsmann Stiftung, an independent foundation, of the US offer.
“Firms generally prefer tax incentives over direct subsidies because they offer greater flexibility, with less administrative burden or political scrutiny,” he pointed out.
Despite Musk’s past views on such subsidies, the Gigafactory is now receiving German taxpayer money as it rolls out Model Ys, while subsidies helped create sales surges of his Tesla cars.
Funding Tesla’s Grünheide factory
Shortly after his online “Fourth Reich” tirade, the German state of Brandenburg made its first of three of €24m instalments to Tesla’s Grünheide battery factory, following a European Commission green light under a Ukraine-war crisis-and-transformation framework.
EUobserver findings also indicate that Germany is entitled to several hundred million euros as a proportional share of Covid-era refinancing for the subsidies it paid out to Tesla owners between 2021 and 2023. This is an illustrative estimate based on figures provided by Germany’s finance ministry.
