Tesla China Model 3: Tesla Model 3, made in China, unveiled

After launching manufacturing facilities in the United States and China, Tesla's next location is apparently in Europe.

Tesla Chief Executive Elon Musk announced Tuesday 12 November the electric auto maker will build its European Gigafactory in Berlin.

"Will build batteries, powertrains & vehicles, starting with Model Y", Musk also tweeted, a few seconds after the initial, multi-coloured fanfare.

Tesla producing electric cars in Germany could wave a checkered flag at the local competition, such as Volkswagen, BMW, and Daimler, speeding up innovation in the sector there, Dudenhöffer said. Everyone knows that German engineering is outstanding, for sure, and that's part of the reason why we are locating our gigafactory Europe in Germany.

However, Musk had said on several occasions that Germany was a frontrunner as a location for the first European Gigafactory - the surprise was that Brandenburg was chosen and not, as many expected, the wealthy western states of Lower Saxony or North Rhine-Westphalia.

Musk said that the plan is for the factory to be built near Berlin's new airport, which is located just outside the city limits in neighboring Brandenburg state and now slated to open next year after years of delays.

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Mass production of the auto will start in 2021 and the vehicle will be sold under the Hengchi brand, China Evergrande said in a statement on Tuesday. Musk previously said that he would like the European facility to be operational by 2021. He said: "Cell production is highly automated". It will also cut costs for Tesla in one its most important markets, especially for the mid-priced Model 3. "We lobbied for this for a long time in intensive talks and with good arguments".

Tesla said it is producing vehicles "on a trial basis" at its recently opened "Gigafactory" in Shanghai, which will help boost global production and sales. The first vehicle to be built there will be the upcoming Model Y small SUV, according to Musk.

Currently, all of the company's vehicles are built at its factory in California, using batteries produced in Nevada.

(Tesla's beleaguered solar panel factory in Buffalo, NY, is Gigafactory 2.) Tesla took a more integrated approach in China, building batteries and cars in the same facility.

Tesla's European plan comes as the carmaker also moves ahead with a $2bn (£1.6bn) factory in Shanghai.

  • Darren Santiago