Tesla Inc. is negotiating with German and Dutch authorities for planned construction of the company’s first major European factory, The Wall Street Journal reported, citing officials with knowledge of the matter.
The facility would produce cars and batteries under one roof. Officials of the western German states of Rhineland-Palatinate and Saarland, as well as the Netherlands, have been lobbying Tesla to host the factory.
Elon Musk said in June that he would prefer to have his first European Gigafactory built in Germany.
"Germany is a leading choice for Europe. Perhaps on the German-French border makes sense, near the Benelux countries," Musk said on Twitter.
Tesla already has an engineering division in Pruem, Germany, that is about 30 kilometers (18.6 miles) from Belgium and about 100 kilometers (62 miles) from the French border.
Just earlier this month, Elon Musk announced plans for a Gigafactory in Shanghai, China, where he wants to produce 500,000 vehicles annually by 2020. This would help his Chinese customers avoid the 40 percent duty levied on autos imported from the United States.
The Palo Alto, California-based company is also mulling the production of electric semi-trucks and pickups.