Tesla's sights set on Berlin for first European battery plant

Uncertainty around Brexit “made it too risky to put a Gigafactory in the UK,” said chief executive Elon Musk as he announced a new factory, engineering and design centre in Germany

Tesla Inc’s (NASDAQ:TSLA) chief executive, Elon Musk has announced that the electric car company will build its first European factory in Berlin, with production expected to start in 2021.

Musk made the announcement at an awards ceremony in Germany on Tuesday, saying that the company’s fourth ‘gigafactory’ battery plant will also build powertrains and vehicles.

READ: Tesla gets green light to begin production in China

He added that there are also plans to launch a separate engineering and design centre in the German capital.

The carmaker may be trying to see off local competition in Europe from Volkswagen Group, which recently announced plans to become the world’s largest electric-vehicle manufacturer with 22mln vehicles produced in the next decade.

Tesla continues to ramp up investment, gaining approval to start production at its US$2bn Chinese factory in October.

Musk first mooted building a gigafactory in Europe in 2015 to add to its headquarters and final assembly plant in the Netherlands, but no country had been announced until Tuesday.

“Brexit [uncertainty] made it too risky to put a Gigafactory in the UK,” Musk explained in an interview with Auto Express, having said in the past that he wanted to build a plant in the UK and that Brexit was not likely to have “a significant impact” on the company's plans.

The gigafactory europe will be Tesla’s fourth battery plant, adding to the existing plant in Nevada and plans for two more in New York and Shanghai.