Elon Musk: Berlin 'gigafactory' will build Teslas starting with the Model Y

Tesla Model Y action

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Elon Musk's Tuesday announcement that his Californian firm is coming marks the first foreign vehicle company setting up shop in Germany "in decades", said analyst Stefan Bratzel of the Center of Automotive Management - "symbolic for the new world and the reordering of the industry".

In typical Musk style, he confirmed the decision by Tweeting "Giga Berlin", and he added that the new factory will build batteries, powertrains and vehicles, starting with the production of the Tesla Model Y.

"Everyone knows that German engineering is outstanding and that's part of the reason we are locating our Gigafactory Europe in Germany", Musk was quoted by the BBC as saying at the awards ceremony. Tesla's first Gigafactory was built in Reno, Nevada back in 2015 (see it below), and "limited" production began in 2016.

Tesla is estimated to have some 30 per cent of the European market for battery-powered cars. Tesla said it would build its next factory near Berlin, along with an engineering and design center. Musk previously said that he would like the European facility to be operational by 2021.

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After launching manufacturing facilities in the United States and China, Tesla's next location is apparently in Europe. He said the factory will be near the new Berlin airport.

Mr Musk also cited risks surrounding the UK's exit from the European Union for his decision, according to AutoExpress. "Most of the set-up work was done by British guys".

Tesla did not respond to requests to elaborate on how Brexit helped swing it for Berlin, but German government spokesman Steffen Seibert told reporters that "we see in it proof of trust in Germany as a location for innovation".

German automaker Volkswagen, which last week began mass production of its ID.3 electric auto, welcomed rival Tesla's decision to build the factory on its home turf.

Tesla announces plans to build Gigafactory 4 in Berlin
It will also be the company's fourth battery plant, following two in the USA and one in China. Aerial photo taken on shows the tesla gigafactory at night in Shanghai, China .

At the time, Tesla outlined plans "to add over 1,000 advanced engineering and skilled technician jobs in Germany over the next two years". "But in reality it comes as little surprise".

Brexit has stymied investment in the auto industry, Bailey argued, which is down by over 80% in the last three years.

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German giants are behind in adapting fleets to meet new European emissions limits, and have left it until late to commit to electric drive in a big way.

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