BERLIN, GERMANY - US electric vehicle pioneer Tesla will build its first European factory and design centre near Berlin to produce cars "Made in Germany" as it seeks to burnish its reputation for reliability and sporting prowess.
Tesla chief Elon Musk made the announcement at a prestigious German car awards ceremony late on Tuesday and said its European gigafactory would make batteries, powertrains and vehicles - starting with its Model Y SUV.
Tesla's move into Europe comes at a challenging time for the Silicon Valley trailblazer which is investing heavily in new factories and new products such as a pickup truck, but the company has yet to prove it can be consistently profitable.
Tesla's plan to start production in another continent comes at a time the motor industry is struggling with export restrictions in the form of trade tariffs. Tesla is also opening a factory in Shanghai, built with Chinese state support.
While Tesla will be taking on BMW, Mercedes and Volkswagen on their home turf as they start rolling out zero-emission vehicles, the move fits with the German government's plan to transform the country into a centre of excellence for electric mobility.