Tesla plans to build its first European electric vehicle factory near Berlin, CEO Elon Musk said late Tuesday in the German capital.
Tesla’s move comes after the government in Berlin last week announced a major boost for EVs increasing cash incentives by up to Eur6,000 ($6,700) per vehicle as it targets one million EVs and 50,000 chargers by 2022.
The plant, Tesla’s fourth, would build batteries, powertrains and vehicles, starting with the model Y sports utility vehicle, Musk said later in a tweet.
Federal German energy and economy minister Peter Altmaier Wednesday said the decision was a milestone for electro-mobility and batteries.
Last month, Germany also introduced carbon pricing for transport starting 2021 as the government plans to cut carbon emissions from cars with 10 million EVs needed on German roads to achieve the 2030 climate targets for the sector.
German car manufacturers plan to triple their electric models over the next years with VW most advanced, starting mass production at its first pure EV factory at Zwickau last week.
According to local media reports, the new Tesla plant just outside Berlin near Gruenheide could start production in 2021.
The IEA in its World Energy Outlook published Wednesday sees some 270 million EVs under the Stated Policies Scenario in advanced economies by 2040, lifting demand by 900 TWh with 190 million of these EVs on the road in the US and Europe.
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