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Govʼt ups financial incentive to lure Tesla mega-investment

The government is stepping up its efforts to make the country more attractive in the regional competition for a new Tesla electric car factory. Owner Elon Musk is expected to announce by the end of this year the location of its first European factory, according to online news portal index.hu.

Hungarian company Autóipari Próbapálya Zala Kft. is developing a test track suitable for testing self-driving cars at Zalaegerszeg (230 km southwest of Budapest). All Tesla vehicles, including the new Model 3, have the hardware needed for full self-driving capability. CEO Elon Musk announced last year a new “gigafactory” battery production plant and automated manufacturing research center.

According to index.hu, the government is preparing the ground for winning the new Tesla investment by making a HUF 15 billion capital increase, through the Ministry for National Economy, at the Zala company, which is expected to complete the construction of the test track in the first half of 2018. This will be only the first element of a center to be built on 250 hectares and the government is prepared to invest as much as HUF 42 bln in the new facility, said László Palkovics, government commissioner for the project.

Minister of Foreign Affairs and Trade Péter Szijjártó has confirmed that the government is aiming to attract Tesla to Hungary. He added that a meeting between himself and the vice president of Tesla has already been scheduled to discuss the new European factory.

Index.hu added that Tesla intends to create a gigafactory on the European continent similar to its facility in Nevada, the total value of which may reportedly reach approximately EUR 5 bln.