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UPDATE 4-‘Made in Germany’: Tesla sets up shop in Berlin

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UPDATE 4-'Made in Germany': Tesla sets up shop in Berlin

* Tesla will also build a design center in Berlin – Musk

* & # 39; We have advocated this for a long time & # 39; – state premier

* Thousands of jobs to be created in the Berlin area – official (Adds Tesla starts hiring in Europe, comments from Altmaier and Pop from Berlin, changes the data line)

BERLIN (Reuters) – US pioneer electric vehicle Tesla will build its first European factory and design center near Berlin to produce "Made in Germany" cars as it seeks to improve its reputation for reliability and sportsmanship.

Tesla Chief Executive Elon Musk made the announcement at a prestigious German car delivery ceremony on Tuesday night and said his European factory would produce batteries, transmission groups and vehicles – starting with his sports utility vehicle. Y model

Tesla's move to Europe comes at a challenging time for the Silicon Valley pioneer, who is investing heavily in new factories and new products, such as a pickup truck, but has yet to prove that it can be consistently profitable.

Tesla's plan to start production on another continent comes at a time when the auto industry is facing export restrictions in the form of trade tariffs. Tesla is also opening a factory in Shanghai, built with the support of the Chinese state.

While Tesla will be facing BMW, Mercedes and Volkswagen in their national territory, when they begin launching zero emission vehicles, the decision fits in with the German government's plan to transform the country into a center of excellence in electric mobility.

"Tesla's decision to build an ultra-modern electric car factory in Germany is further proof of Germany's appeal as an automotive center," Economy Minister Peter Altmaier said in a statement on Wednesday.

The Berlin government has already earmarked financial support for the manufacture of electric car battery cells in an attempt to combat the dominance of Asian companies, although it is unclear whether Tesla will receive similar German support.

LOBBIED HARD

While Germany's renowned auto industry is headquartered mainly in the south of Europe's largest economy, the capital has become a hub for startups and has attracted many creative and technology companies since the fall of the Berlin Wall three decades ago.

Making his announcement at Germany's Golden Steering Awards in Berlin, Musk said the factory would be near Brandenburg's new international airport.

The story goes on

Musk said in June last year that Germany pioneered Tesla's first factory in Europe and the company announced last month that it expected to start production in Europe by 2021.

"Tesla is coming to Brandenburg with a big investment," Dietmar Woidke, the premier of Brandenburg state surrounding Berlin, said in a statement. "We have been pushing for a long time in intense conversations with good arguments."

Tesla began hiring for the German project, according to job offers on its website, which showed that the automaker was looking to fill four roles, from engineering to construction.

The Berlin minister in charge of economic affairs, Ramona Pop, told RBB that there were talks about creating 6,000 to 7,000 jobs in production alone, with hundreds or even thousands more in areas such as design, software or research.

Musk's appearance at the awards ceremony is another example of Tesla's efforts to give his cars the German seal of quality.

He already owns an engineering firm in Pruem that specializes in automated manufacturing systems for battery plants and has tested his cars at Nordschleife, the notorious northern circuit of the Nuerburgring race track. (Reporting by Edward Taylor in Frankfurt, Paul Carrel, Rene Wagner and Thomas Seythal in Berlin, Yilei Sun in Beijing and Ayanti Bera in Bengaluru; David Clarke Edition)

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