"Berlin rocks," Mr Musk said, adding Tesla would build an engineering and design centre in the German capital.

Tesla previously said it aimed to start production in Europe in 2021.

The moves come as the firm, which has also invested heavily in a Chinese factory, faces intensifying competition in the electric vehicle industry.

Mr Musk made the announcement at an awards ceremony in Germany on Tuesday. The company already has an assembly site in the Netherlands, but the plans for Germany are on a far larger scale. "Everyone knows that German engineering is outstanding and that's part of the reason we are locating our Gigafactory Europe in Germany," he said.

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