Tesla Motors Inc. is in discussions with the German government over the prospect of building a battery factory in the country, Economy Minister Sigmar Gabriel said.
Tesla Chief Executive Officer Elon Musk has been in contact with German officials and may seek state support for the facility, Gabriel said at an event at a Mercedes-Benz car factory in Rastatt, Germany last week. Gabriel didn't provide details about the proposed plant or timing of a decision.
"We're in talks" with the Tesla CEO about a possible plant, Gabriel said. "I assume he will want public funds."
A battery factory in Germany would open a new front in Tesla's competition with luxury-car leader BMW AG and former shareholder and Mercedes parent Daimler AG, which makes batteries in Kamenz in eastern Germany and plans to expand production.
A new plant would also be a sign of more aggressive expansion as Tesla prepares to open its Gigafactory, the 126-acre battery plant currently under construction in Nevada outside of Reno. Tesla has said that Germany is a key market for its household battery-storage systems.