Tesla's Elon Musk says Brexit uncertainty made UK 'too risky' for new factory

13 November 2019, 14:16 | Updated: 13 November 2019, 15:55

Tesla rejected the UK as the location for its first major European plant and chose Germany instead because Brexit uncertainty "made it too risky", Elon Musk has said.

The chief executive of the electric car-maker made his comments after announcing the factory and design centre would be built near Berlin.

The new plant, which is set to create thousands of jobs in the area, will make batteries, powertrains and cars.

Speaking to the industry website Auto Express, Mr Musk said: "Brexit (uncertainty) made it too risky to put a Gigafactory in the UK."

Major UK car manufacturers such as Nissan have already warned a no-deal exit, where companies face tariffs, would leave its European business unsustainable.

Tesla's move is a major boost to Germany's slowing manufacturing industry, coming ahead of figures set to show whether Europe's biggest economy has slipped into recession for the first time since 2013.

Mr Musk said: "Everyone knows German engineering is outstanding for sure.

"You know that is part of the reason why we are locating Gigafactory Europe in Germany."

It also extends the Silicon Valley firm's production beyond the US at a time when global trade tariffs make exports more difficult.

Tesla has struggled to ramp up production and has yet to prove it can be consistently turn a profit as rivals including Audi-owner Volkswagen revamp plants to mass produce electric cars.

Germany's economy minister Peter Altmaier said: "Tesla's decision to build an ultra-modern factory for electric cars in Germany is further proof of the appeal of Germany as an automotive hub."

The Berlin government has earmarked financial support for making electric car battery cells locally as a way to secure manufacturing jobs as tougher emissions rules threaten demand for older technologies, like diesel engines.

Officials said any support given to Tesla would be in accordance with EU rules.

Even Germany's motor industry association, VDA, welcomed the US rival, saying: "Elon Musk's announcement shows how important Germany is as a location for producing electric vehicles in Europe.

"We don't shy away from competition, quite the opposite."