Tesla Chief Executive Elon Musk made the announcement at a prestigious German car awards ceremony late on Tuesday and said its new plant would make batteries, powertrains and vehicles – starting with its Model Y sports utility vehicle.
Tesla’s move into Europe comes at a challenging time for the Silicon Valley trailblazer which is investing heavily in new factories and new products, such as a pickup truck, but has yet to prove it can be consistently profitable.
While Tesla will be taking on BMW, Mercedes and Volkswagen on their home turf as they start rolling out zero-emission vehicles, the move fits with the German government’s plan to transform the country into a centre of excellence for electric mobility.
“Tesla’s decision to build an ultramodern factory for electric cars in Germany is further proof of the appeal of Germany as an automotive hub,” Economy Minister Peter Altmaier said in a statement on Wednesday.
Germany’s biggest labour union, the influential IG Metall, welcomed Tesla’s plan. “This strengthens Berlin as an industrial location and creates jobs. We hope this sets an example,” Birgit Dietze IG Metall’s regional head said on Wednesday.
Musk, who said in June last year that Germany was the frontrunner for Tesla’s first plant in Europe, told the awards ceremony on Tuesday that the factory would be near the city’s new Brandenburg international airport.
Berlin’s minister in charge of economic affairs, Ramona Pop, told public broadcaster RBB there had been talks about creating 6,000 to 7,000 jobs in production alone, with hundreds or even thousands more in areas such as design, software or research.
It already has an engineering firm in Pruem that specializes in automated manufacturing systems for battery factories and has tested its cars on the Nordschleife, the notorious northern loop of the Nuerburgring racing track.