In order to cater to the demands of the European market, Tesla is going to set up an auto factory in Germany, announced the Chief Executive Officer of Tesla, Elon Musk.

Musk made the announcement on Tuesday during a ceremony at Germany’s Golden Steering Wheel awards. He said that the new “Gigafactory” would be “in the Berlin area.”

The company has planned the facility near Berlin’s new airport and it would also set up a design center in the area.

“Everyone knows that German engineering is outstanding and that’s part of the reason we are locating our Gigafactory Europe in Germany,” Musk was quoted as saying by AFP.

“We are also going to create an engineering and design center in Berlin because I think Berlin has some of the best art in the world,” he added.

As per the reports, Tesla aims to begin European production by 2021.

With this announcement the electric car maker is further expanding its horizon and is eyeing for the 30 per cent European market share of battery-powered cars. Last month it said its factory in China had started production.

(With input from agencies)