The German government on Wednesday November 13th welcomed a decision by Tesla to open a factory in Berlin, a move it believes will boost the country's shift into the electric car era, Reuters reports.
Tesla Chief Executive Elon Musk announced the plan late on Tuesday. It will see the US electric vehicle pioneer build its first European production facility and design centre near Berlin, bringing at least 6,000 jobs to the region.
The move will help Germany's efforts to position itself as an e-vehicle and battery cell production centre and will allow Tesla to produce cars with the quality label ‘Made in Germany’. However, the heavily indebted company will have to cope with the high costs of running a business in Europe's largest economy.
"We see it as recognition of Germany as a location for making cars," Economy Minister Peter Altmaier said of Tesla's investment.
"We think we now have the chance, in the coming years, to become an important international centre in this future-oriented sector," he said.
The plan is also a shot in the arm for Germany as a centre for manufacturing, after BMW and Mercedes in recent years chose to build new plants in Hungary, where production costs are lower. The German car industry is also still recovering from Volkswagen's admission in 2015 that it falsified United States diesel emissions tests.
Tesla’s investment comes after Germany last month introduced tax incentives to push sales of electric cars and infrastructure after the government admitted it would miss a target to have one million electric cars on the road by 2020.
Now the government wants to have 10 million electric vehicles and 1 million charging stations by 2030.
Welcoming the announcement, Brandenburg premier Dietmar Woidke said he had "lobbied for this for a long time.” His state which covers the area around Berlin has, like much of the former Communist East, faced economic challenges since German reunification in 1990.
Any official support given to Tesla would be in accordance with European Union rules, Woidke added.