ELON MUSK surprised the automotive establishment when he selected a small town in eastern Germany for Tesla Inc.’s first European car factory. The politician who drew him there now wants to turn the region into a major electric vehicle (EV) supply hub.

The battery cell production facility Tesla plans to add at the electric vehicle plant it’s building in Gruenheide could be online in roughly two years, Joerg Steinbach, economy minister in the state of Brandenburg, said in an interview.

And Tesla is far from alone. German chemicals giant BASF SE intends to make cathodes and recycle batteries in nearby Schwarzheide. France’s Air Liquide SA will invest 40 million euros (US$48 million) in supplying oxygen and nitrogen to that site. And U.S. firm Microvast aims to build fast-charging modules for vans and SUVs in Ludwigsfelde.

Those investments and Musk’s moonshot ambitions — he’s said the Gruenheide site may eventually become the world’s largest battery cell plant — are fueling hopes that Brandenburg, which lost much of its heavy industry during World War II and after the fall of the Berlin Wall, can emerge as an EV supply hub sustaining thousands of jobs.

“That’s the vision I’m pursuing,” Steinbach said, adding that Tesla’s arrival has put the state on the map for companies looking to set up new industrial sites. “We have had more inquiries for possible investments in Brandenburg than ever before — and all that in the middle of a pandemic.”

Before Tesla makes batteries in Germany, it’s focused on getting the assembly of Model Ys in Gruenheide up and running. The site is slated to start making the model in the middle of this year and eventually produce as many as 500,000 vehicles annually.

Steinbach was instrumental in securing Tesla’s German investment in late 2019, touting Brandenburg’s proximity to Berlin, its skilled labor force and abundance of clean-energy plants.

The Gruenheide plant is key for the U.S. carmaker, underpinning Musk’s European expansion plans just as Volkswagen AG, Daimler AG and BMW AG broaden their EV lineups.

(SD-Agencies)