Tesla’s decision to build its first European “gigafactory” for batteries and vehicles in Germany will be an enormous boost for the country’s lagging shift to electric mobility, politicians and mobility experts have said. Economy minister Peter Altmaier called the surprise announcement by Tesla CEO Elon Musk a “milestone” for the roll-out of electric mobility and the production of battery cells, according to Clean Energy Wire.

He said the investment will “enhance Germany’s status as an automobile industry location on an international level.” Christian Hochfeld, head of clean mobility think tank Agora Verkehrswende, called the decision “a huge gain for the clean mobility transition and the transformation of the German car industry.” He added: “Tesla puts German carmakers under pressure in the shift to green mobility and will give them a run for their money.”

Musk said his company “will build batteries, powertrains and vehicles, starting with [the electric compact SUV] Model Y” in the new factory to be located just south-east of Berlin. Musk also said his company will build an engineering and design centre. Unnamed sources told the local newspaper Potsdamer Neueste Nachrichten the investment will be worth billions of euros, and will create around 10,000 jobs.