Tesla will start construction of European plant next year, German politician says

BERLIN -- Tesla will begin constructing its new European plant in the first quarter of 2020, a leading German politician said.

Tesla also has signed a declaration of intent for the factory with the state of Brandenburg where the plant will be located, the state's economics minister, Joerg Steinbach, told the German press.

Tesla CEO Elon Musk said earlier this week that the electric-car maker will build its European gigafactory near the yet-to-open Berlin Brandenburg international airport, with a engineering and design center within the city limits.

The factory will make batteries, powertrains and vehicles, beginning with the Model Y crossover unveiled earlier this year, Musk said in a tweet. It’s also expected to add the Model 3.

The plant will be built on an industrial estate in Gruenheide and will involve an investment "in the billions," state authorities said.

The first phase of production, which is scheduled to begin in 2021, is expected to create 3,000 to 3,500 jobs in its first phase, rising to 7,000 to 8,000.

Steinbach sees Tesla's schedule for the factory as ambitious. "They will have to submit documents at record speed," he said.

The government in Brandenburg, one of five federal states in Germany's former communist east, lobbied hard to win over Musk, offering at least 100 million euros in aid.

The state’s negotiators touted Brandenburg’s proximity to Berlin, its skilled labor force and an abundance of clean-energy plants.

Tesla long relied on a single assembly plant, based in Fremont, California, for its car production.

The company is on the verge of starting sales of Model 3s produced at its latest facility, near Shanghai, which it erected in record time.

Bloomberg contributed to this report