Tesla to open first European production plant in Berlin

Tesla will build its first European factory and design centre near Berlin and compete with local rivals Audi, BMW and Mercedes as they prepare to launch electric vehicles.

Tesla’s Chief Executive Elon Musk made the announcement about his company’s Gigafactory at an automotive awards ceremony in Germany this week. Stating that “Berlin rocks!” he said that Tesla’s new plant would make batteries, powertrains and cars – beginning with the Model Y sports utility vehicle.

“Everyone knows German engineering is outstanding for sure. You know that is part of the reason why we are locating Gigafactory Europe in Germany,”he said.

The news provides a boost for Germany as a centre for manufacturing after BMW and Mercedes chose to build new factories in Hungary, and after the country’s automotive industry suffered setbacks following Volkswagen’s admission that it cheated US diesel emissions tests in 2015.

“Brexit made it too risky to put a Gigafactory in the UK," Musk told the trade magazine AutoExpress.

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Musk said the factory would be near Berlin’s new Brandenburg international airport, diversifying the Silicon Valley firm’s production beyond the United States at a time when global trade tariffs make exports more difficult. Besides Europe, Tesla is opening a factory in Shanghai. 

Tesla’s proposed factory will be within commuting distance of Poland, where labour costs are cheaper.

“Tesla’s decision to build an ultra-modern factory for electric cars in Germany is further proof of the appeal of Germany as an automotive hub,” Germany’s Economy Minister Peter Altmaier commented.

Dietmar Woidke, the premier of the Brandenburg state that surrounds Berlin, said any official support given to Tesla would be in accordance with European Union rules.