On Tuesday evening, technology entrepreneur, investor, and engineer Musk revealed during a ceremony at Germany's Golden Steering Wheel awards that the new "Gigafactory" for electric cars and batteries would be "in the Berlin area."
The 48-year-old said the electric car maker planned the facility "near the new airport" in Berlin-Brandenburg.
"Everyone knows that German engineering is outstanding and that's part of the reason we are locating our Gigafactory Europe in Germany," he said at the awards run by Bild am Sonntag and Auto Bild. "We will definitely have to put in a higher pace than the airport," Musk added, referring to the notorious delays of the building of Berlin's BER airport. "We are also going to create an engineering and design centre in Berlin because I think Berlin has some of the best art in the world," Musk said.
He said the firm planned to set up a design hub in the capital.
The news highlights a further global expansion for the firm, which last month said its factory in China had started production.
Musk offered few details, but reports have said the company hopes to begin European production by 2021. "Giga Berlin," Musk tweeted, bookending the words with heart emojis."Will build batteries, powertrains & vehicles, starting with Model Y," he added in another tweet. Tesla is estimated to have some 30 percent of the European market for battery-powered cars.
How many jobs will be created?
According to Bild, up to 10,000 jobs will be created.
The new factory is to be built on an industrial site in Grünheide, Brandenburg, in the Oder-Spree district southeast of Berlin, according to Berlin daily Tagesspiegel.
A BMW plant had already been considered for this site. But now a direct competitor to BMW's popular 3-series is likely to emerge there – with German technology. Three years ago, Tesla bought the German machine manufacturer Grohmann, which specializes in production lines.
Other federal states – including Saarland and Lower Saxony – were also initially in discussion as possible sites for the new Tesla factory. In fact, very few people had considered the Berlin-Brandenburg area, according to Spiegel.
Is this important for Germany?
Musk's announcement is good news for the German auto industry, according to professor Ferdinand Dudenhöffer of the Center for Automotive Research at the University of Duisburg-Essen. Tesla producing electric cars in Germany could wave a checkered flag at the local competition, such as Volkswagen, BMW, and Daimler, speeding up innovation in the sector there, Dudenhöffer said.
However, Dudenhöfer also urged people to be cautious when talking about job creation estimates. He said: "Cell production is highly automated. Energy costs are far more important than labour costs."
Tesla is already looking for employees for the factory in Germany on its vacancies page. According to "Manager Magazin", Elon Musk had already confirmed at the presentation of the Tesla figures for the third quarter of 2019 that his company wanted to build a factory in Europe. At that time it was only stated that the location would be announced before the end of the year.
The factory in Germany is expected to go into operation at the end of 2021.
What are politicians saying?
The news has been welcomed, especially in the eastern German state of Brandenburg which surrounds Berlin.
State premier Dietmar Woidke told DPA: "This is excellent news for our state. We have worked hard to achieve this during intense talks and with good arguments. I am happy that Elon Musk has chosen Brandenburg as the location. The Giga factory will give Brandenburg a further boost as an innovative and international location and will give many people a good job."
Berlin's Economics Senator Ramona Pop of the Green Party said: "Those who have visions come to Berlin. Welcome to the metropolitan region, Tesla!"
What else do we know about Tesla?
Tesla last month announced that it posted a profit in the recently ended quarter instead of taking a loss as analysts expected.
Tesla said it is producing vehicles "on a trial basis" at its recently opened "Gigafactory" in Shanghai, which will help boost global production and sales. Musk was optimistic that the Shanghai factory could begin cranking out Model Y vehicles by the middle of next year, and believed the new model has the potential to be a huge seller.
The company has been dogged by concerns it may not be able to ramp up production to meet demand and that Musk may have overstated Tesla's goals for sales and technology improvements. Musk expected the Shanghai factory to hit "volume production" in a few months, and that it could be possible to significantly ramp up Tesla production. He noted that a battery plant was also being built on the Chinese site.
Tesla's first "Gigafactory" was constructed in the US state of Nevada, and its vehicles are built mostly at a factory in Northern California.