Tesla's Elong Musk says Germany a front runner for Europe Gigafactory

STOCKHOLM, June 20 (Reuters) - U.S. electric carmaker Tesla favors Germany as the location for its first European Gigafactory, its chief executive said, in what would be the latest move by an outside firm into the European battery market.

Industry experts expect a green car revolution to boost Europe's battery market to around 250 billion euros ($290 billion) by 2025. Asian companies including CATL and Samsung have already signed up companies or set up their own European operations, prompting European politicians and business leaders to call for more home-grown investment.

"Germany is a leading choice for Europe. Perhaps on the German-French border makes sense, near the Benelux countries," Tesla's billionaire boss Elon Musk said on Twitter on Tuesday, responding to a public tweet.

Tesla already has operations in Pruem, Germany, which is only 30 kilometers from Belgium, and about 100 kilometers from the French border.

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Tesla's Model X SUV
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Tesla's Model X SUV
Tesla Motors Inc.'s Model X vehicle is unveiled at Tesla's design studio in Hawthorne, California, U.S., on Thursday, Feb. 9, 2012. The Model X, touted by Tesla as faster than Porsche AG's 911 sports car and roomier than Audi AG's Q7 SUV, will be built in 2013 at the company's Fremont, California, plant that starts making the Model S this year. The CUV sports 'Falcon Doors,' dual AWD units, seating for seven and a price tag just under $50,000 after federal tax credits. (Photo by Tim Rue/Corbis via Getty Images)
Tesla Motors Inc.'s Model X vehicle is unveiled at Tesla's design studio in Hawthorne, California, U.S., on Thursday, Feb. 9, 2012. The Model X, touted by Tesla as faster than Porsche AG's 911 sports car and roomier than Audi AG's Q7 SUV, will be built in 2013 at the company's Fremont, California, plant that starts making the Model S this year. The CUV sports 'Falcon Doors,' dual AWD units, seating for seven and a price tag just under $50,000 after federal tax credits. (Photo by Tim Rue/Corbis via Getty Images)
Tesla Motors Inc.'s Model X vehicle is unveiled at Tesla's design studio in Hawthorne, California, U.S., on Thursday, Feb. 9, 2012. The Model X, touted by Tesla as faster than Porsche AG's 911 sports car and roomier than Audi AG's Q7 SUV, will be built in 2013 at the company's Fremont, California, plant that starts making the Model S this year. The CUV sports 'Falcon Doors,' dual AWD units, seating for seven and a price tag just under $50,000 after federal tax credits. (Photo by Tim Rue/Corbis via Getty Images)
Tesla Motors Inc.'s Model X vehicle is unveiled at Tesla's design studio in Hawthorne, California, U.S., on Thursday, Feb. 9, 2012. The Model X, touted by Tesla as faster than Porsche AG's 911 sports car and roomier than Audi AG's Q7 SUV, will be built in 2013 at the company's Fremont, California, plant that starts making the Model S this year. The CUV sports 'Falcon Doors,' dual AWD units, seating for seven and a price tag just under $50,000 after federal tax credits. (Photo by Tim Rue/Corbis via Getty Images)
The interior of a Tesla Motors Inc. Model X sport utility vehicle (SUV) is displayed during an event in Fremont, California, U.S., on Tuesday, Sept. 29, 2015. Elon Musk handed over the first six Model X SUVs to owners in California Tuesday night, as Tesla reached a milestone of having two all-electric vehicles in production at the same time. Photographer: David Paul Morris/Bloomberg via Getty Images
The interior of a Tesla Motors Inc. Model X sport utility vehicle (SUV) is displayed during an event in Fremont, California, U.S., on Tuesday, Sept. 29, 2015. Elon Musk handed over the first six Model X SUVs to owners in California Tuesday night, as Tesla reached a milestone of having two all-electric vehicles in production at the same time. Photographer: David Paul Morris/Bloomberg via Getty Images
The Tesla Motors Inc. Model X sport utility vehicle (SUV) is driven during an event in Fremont, California, U.S., on Tuesday, Sept. 29, 2015. Elon Musk handed over the first six Model X SUVs to owners in California Tuesday night, as Tesla reached a milestone of having two all-electric vehicles in production at the same time. Photographer: David Paul Morris/Bloomberg via Getty Images
The Tesla Motors Inc. Model X sport utility vehicle (SUV) is driven during an event in Fremont, California, U.S., on Tuesday, Sept. 29, 2015. Elon Musk handed over the first six Model X SUVs to owners in California Tuesday night, as Tesla reached a milestone of having two all-electric vehicles in production at the same time. Photographer: David Paul Morris/Bloomberg via Getty Images
The Tesla Motors Inc. Model X sport utility vehicle (SUV) is displayed during an event in Fremont, California, U.S., on Tuesday, Sept. 29, 2015. Elon Musk handed over the first six Model X SUVs to owners in California Tuesday night, as Tesla reached a milestone of having two all-electric vehicles in production at the same time. Photographer: David Paul Morris/Bloomberg via Getty Images
FREMONT, CA - SEPTEMBER 29: Tesla CEO Elon Musk steps out of the new Tesla Model X during an event to launch the company's new crossover SUV on September 29, 2015 in Fremont, California. After several production delays, Elon Mush officially launched the much anticipated Tesla Model X Crossover SUV. The (Photo by Justin Sullivan/Getty Images)
The second row seats of the Tesla Motors Inc. Model X sport utility vehicle (SUV) are seen during an event in Fremont, California, U.S., on Tuesday, Sept. 29, 2015. Elon Musk handed over the first six Model X SUVs to owners in California Tuesday night, as Tesla reached a milestone of having two all-electric vehicles in production at the same time. Photographer: David Paul Morris/Bloomberg via Getty Images
Tesla Model X sports utility vehicles (SUV) stand on the factory floor ahead of assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
An employee looks inside a Tesla Model X sports utility vehicle (SUV) following assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
A Tesla Model X sports utility vehicle (SUV) drives into a rain testing chamber during assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
Employees fit rear axles to Tesla Model X sports utility vehicles (SUV) as they sit in elevated cradles during assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
Tesla Model X sports utility vehicles (SUV) stand on hydraulic platforms during assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
A Tesla Model X sports utility vehicle (SUV) undergoes wheel alignment checks during assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
Electrical charging stations stand on the factory floor at the Tesla Motors Inc. electric automobile factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
A battery pack stands on a trolley as Tesla Model X sports utility vehicles (SUV) sit in cradles during assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
The rear gull wing doors of a Tesla Model X sports utility vehicle (SUV) sit open following assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
The rear gull wing doors of a Tesla Model X sports utility vehicle (SUV) sit open during assembly for the European market at the Tesla Motors Inc. factory in Tilburg, Netherlands, on Friday, Dec. 9, 2016. A boom in electric vehicles made by the likes of Tesla could erode as much as 10 percent of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd. Photographer: Jasper Juinen/Bloomberg via Getty Images
A Tesla Model X electric SUV is seen charging in Washington, DC, on December 20, 2016. / AFP / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
The interior information screen is seen on the dashboard of a Tesla Motors Inc. Model X P90D electric sport utility vehicle (SUV) at a Tesla Motors Inc. showroom in London, U.K., on Tuesday, Jan. 10, 2017. Tesla customers in the U.K. may find their Christmas cash goes a little further than expected after the U.S. electric-auto manufacturer's plans to raise prices 5 percent in the U.K. have been put off until Jan. 15 from the original beginning-of-the-year deadline. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
A Tesla Motors Inc. Model X P90D electric sport utility vehicle (SUV) stands on display at a Tesla Motors Inc. showroom in London, U.K., on Tuesday, Jan. 10, 2017. Tesla customers in the U.K. may find their Christmas cash goes a little further than expected after the U.S. electric-auto manufacturer's plans to raise prices 5 percent in the U.K. have been put off until Jan. 15 from the original beginning-of-the-year deadline. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
Tesla Inc. Model X P100D sports utility vehicles (SUV) sit on display at the company's new showroom in New York, U.S., on Thursday, Dec. 14, 2017. The Meatpacking District location, which opens to the public at 11 a.m. Friday, lets customers for the first time explore energy offerings, configure cars and place orders all under one roof. Photographer: Mark Kauzlarich/Bloomberg via Getty Images
A Tesla Inc. Model X P100D sports utility vehicle (SUV) sits on display at the company's new showroom in New York, U.S., on Thursday, Dec. 14, 2017. The Meatpacking District location, which opens to the public at 11 a.m. Friday, lets customers for the first time explore energy offerings, configure cars and place orders all under one roof. Photographer: Mark Kauzlarich/Bloomberg via Getty Images
The interior of a Tesla Inc. Model X P100D sports utility vehicle (SUV) is seen at the company's new showroom in New York, U.S., on Thursday, Dec. 14, 2017. The Meatpacking District location, which opens to the public at 11 a.m. Friday, lets customers for the first time explore energy offerings, configure cars and place orders all under one roof. Photographer: Mark Kauzlarich/Bloomberg via Getty Images
A Tesla Inc. Model X P100D sports utility vehicle (SUV), left, sits on display at the company's new showroom in New York, U.S., on Thursday, Dec. 14, 2017. The Meatpacking District location, which opens to the public at 11 a.m. Friday, lets customers for the first time explore energy offerings, configure cars and place orders all under one roof. Photographer: Mark Kauzlarich/Bloomberg via Getty Images
The front trunk space of a Tesla Inc. Model X P100D sports utility vehicle (SUV) is seen at the company's new showroom in New York, U.S., on Thursday, Dec. 14, 2017. The Meatpacking District location, which opens to the public at 11 a.m. Friday, lets customers for the first time explore energy offerings, configure cars and place orders all under one roof. Photographer: Mark Kauzlarich/Bloomberg via Getty Images
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Pruem is the headquarters for Tesla's Grohmann Engineering division, which specializes in automated manufacturing systems for battery making plants. Grohmann recently built a production line for Tesla's U.S. battery factory in Reno, Nevada, to speed up production for its Model 3 electric sedan.

In a sign of the strength of Asia's position in the market, Volkswagen - Europe's biggest carmaker - recently picked LG Chem , Samsung and China's Contemporary Amperex Technology Co Ltd (CATL) to deliver $25 billion of batteries.

CATL is also considering an investment in Germany, the economics ministry of the local state of Thuringia told Reuters. “We are negotiating with Chinese battery manufacturer CATL about localizing production in Thuringia. As far as we know several locations across Europe are being considered for such an investment,” a spokesman for Thuringia said.

Germany's TerraE and Sweden's Northvolt have plans for large lithium-ion battery factories in Europe, but face a battle against companies like Tesla and CATL that have established technical expertise and supply chains.

32 PHOTOS
Tesla Model 3
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Tesla Model 3
A parking lot of predominantly new Tesla Model 3 electric vehicles is seen in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam
A partially wrapped Tesla Model 3 electric vehicle is seen at a lot in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam
A parking lot of predominantly new Tesla Model 3 electric vehicles is seen in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam
A parking lot of predominantly new Tesla Model 3 electric vehicles is seen in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam
A parking lot of predominantly new Tesla Model 3 electric vehicles is seen in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam
A row of new Tesla Model 3 electric vehicles is seen at a parking lot in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam
Rows of new Tesla Model 3 electric vehicles are seen in Richmond, California. Picture taken June 22, 2018. REUTERS/Stephen Lam
A car carrier trailer carries Tesla Model 3 electric sedans, is seen outside the Tesla factory in Fremont, California, U.S. June 22, 2018. REUTERS/Stephen Lam
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
The front hood logo on a 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Solana Beach, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
The wheel of a 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
The newly sold registration sticker on a 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
The door handle on a 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
The logo on a 2018 Tesla Model 3 electric vehicle is shown in Cardiff, California, U.S., in this picture taken June 1, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
The interior of a 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
Tesla Model 3s are shown charging in an underground parking lot next to a Tesla store in San Diego,California, U.S., May 30, 2018. REUTERS/Mike Blake
A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Solana Beach, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake
Side view of a bright red Tesla Model 3 automobile from Tesla Motors parked on the street at Santana Row, a luxury outdoor shopping mall in the Silicon Valley, San Jose, California, June 7, 2018. (Photo by Smith Collection/Gado/Getty Images)
NEW YORK, NY - JUNE 06: Tesla cars are displayed at a showroom in the Meatpacking district in Manhattan on June 6, 2018 in New York City. Tesla stock had its best day since November 2015 on Wednesday rising more than 9.5 percent after the company revealed it is nearing its Model 3 weekly production rate. Also, in a vote shareholders backed Elon Musk as chairman and CEO. (Photo by Spencer Platt/Getty Images)
A Tesla Motors mass-market Model 3 electric car is seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
A Tesla Motors mass-market Model 3 electric car is seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
A Tesla Motors mass-market Model 3 electric car is seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
A Tesla Motors mass-market Model 3 electric car is seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
A Tesla Motors mass-market Model 3 electric car is seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
A Tesla Motors mass-market Model 3 electric car is seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
Tesla Motors' mass-market Model 3 electric cars are seen in this handout picture from Tesla Motors on March 31, 2016. (REUTERS/Tesla Motors/Handout via Reuters)
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Northvolt, founded by a former Tesla executive, recently said it would tap the European Investment Bank for a loan to fund the first leg of construction and also cut the estimated cost of building its Tesla-style factory.

Tesla has previously said it plans to build three more Gigafactories to accompany its first in Nevada, United States. That plant is jointly owned by Panasonic, which is exclusive battery cell supplier for Tesla's mass-market Model 3 sedan.

It was not immediately clear if Tesla would build the European plant with Panasonic.

Reuters did not immediately get a response from Tesla's German media team seeking further comment on Musk's tweet.

Tesla has faced challenges ramping up Model 3 production, forcing it in recent days to announce plans to cut several thousand jobs to help reduce costs.

(Reporting by Esha Vaish in Stockholm and Edward Taylor in Frankfurt; Editing by Mark Potter)

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