The German Economy Ministry confirmed the decision to dpa.

Tesla said it had informed both the federal and the Brandenburg state ministries of its decision to forego the funding. No figure was provided, but the amount is thought to have run to billions of euros.

“Tesla is nevertheless continuing with its plans for the battery and recycling factory in the Berlin-Brandenburg gigafactory,” it said.

Germany’s Economy Ministry said the decision was an indication “that Germany is an attractive location for investment and that foreign investors invest in Germany and Brandenburg.” The Tesla plant is being built in the state of Brandenburg, which surrounds the German capital.

The funding, which had been approved by the European Union authorities, will now be available for other projects.

Tesla is building a car assembly plant as well as the battery production site, focusing on batteries of new design.

Tesla chief executive Elon Musk has said he aims to launch production this year, but Brandenburg still has to give final approval amid local concerns about water consumption.