Tesla will build its next Gigafactory near Berlin, as it looks to tap into the huge pool of automotive engineering talent in Germany.
The factory will be Tesla's fifth, following facilities in Nevada, New York, and California, USA, and Shanghai, China. It will also up the pressure on European carmakers, as they look to rapidly develop and roll out their pure-electric line-ups.
Volkswagen this morning committed to upping its average annual spend on electric vehicle development, from €8.8 billion ($14.3 billion) to €12 billion ($19.5 billion).
The automaker now expects to sell 26 million pure electric vehicles by the 2029 – made up of 20 million cars based on the affordable MEB architecture for the Volkswagen, Audi, Skoda and Seat brands. The remainder will be high-end vehicles developed on the PPE platform from Porsche and Audi.
Elon Musk says the factory will "build batteries, powertrains & vehicles, starting with Model Y", although it's also expected to produce the Model 3 sedan once up and running.
Tesla hasn't revealed when it plans to break ground on the factory, nor when it will being building cars. It will also establish an engineering and design centre in Germany.
Above: The Shanghai Gigafactory is signed into reality.
Musk had previously promised he'd reveal the location of the Tesla European factory before the end of 2019 – and Germany was considered a frontrunner, given its history of automotive development.
Until now, Tesla was only building cars at its Fremont plant in California. However it this month commenced Model 3 production in Shanghai, where it eventually plans to eventually build 3000 cars per week.
The only difference between the Chinese-made Model 3 and those built in the USA is the Tesla badge, which is now in Chinese.