Tesla Motor plans a "gigafactory" in Europe to make cars and the battery cells to power them. The electric-car maker will begin looking for locations next year, a Tesla spokeswoman told Automotive New Europe.
Possible locations for the factory include the Netherlands, France and Spain, according to local media speculation. Tesla hasn't communicated a preference.
Tesla already has a facility in the Netherlands that does final assembly work for European versions of Tesla cars built in the automaker's main factory on Freemont, California.
A Spanish site for the new plant would supply the most sunshine if Tesla decided to replicate the solar roof on its U.S. battery plant in Sparks, Nevada.
Earlier this week Tesla said it had agreed to buy German robotics and automated manufacturing specialist Grohmann Engineering. The company will be renamed Tesla Grohmann Automation. It will "help make our factories the most advanced in the world," Tesla said in a statement.
Grohmann has been working with Tesla for over a year on key projects including the upcoming Model 3, Tesla's first mass-market model, which the automaker touts as an affordable battery powered sports sedan.
Tesla said the new enterprise will develop and build automated manufacturing systems at Grohmann's base in Pruem, Germany. These "will yield exponential improvements in the speed and quality of production, while substantially reducing the capital expenditures required per vehicle," it said.
Tesla CEO Elon Musk Musk announced the factory plan in an investor call earlier this week. A new European plant would give Tesla the extra capacity needed to ramp production to reach Musk's target of building 500,000 vehicles a year by 2018. Earlier this year Tesla said it expected to produce 80,000 to 90,000 cars in 2016.
In May, Tesla said it had 375,000 pre-orders for the Model 3. It said in October that production would start in late 2017 for delivery in 2018.
Tesla sold 11,775 cars in Europe in the first nine months, up 7.6 percent, according to figures from market analysts JATO Dynamics. The sales comprised 9,827 units of the Model S sedan and 1,902 units of the Model X large SUV. Tesla's September sales were up 147 percent to 3,206, boosted by the rollout of the Model X.