Plans to build a cheaper Tesla model in Europe were outlined by Elon Musk last week, according to an insider - but the company remains tight-lipped.
Tesla plans to build a €25,000 car at its factory near Berlin, a source with knowledge of the matter said on Monday, in a long-awaited development for the electric vehicle maker whose aim is for the mass uptake of its cars.
The source, who declined to be named, did not say when production would begin.
Tesla declined to comment.
Chief Executive Elon Musk visited the plant in Gruenheide on Friday and thanked staff for their hard work, a video on Musk-owned social media platform X showed.
At the same meeting, he informed staff of plans to build the €25,000 vehicle there, the source said.
The German plant currently produces the Model Y, Europe's best-selling EV.
Musk had long planned to make a more affordable electric car, but said in 2022 he had not yet mastered the technology and shelved the plan.
Still, sources told Reuters in September that the carmaker was closing in on an innovation that would allow it to die cast nearly all of the underbody of the EV in one piece, a breakthrough that would speed up production and lower costs.
Tesla expansion in Germany
Expanding into the mass market is critical to meeting Tesla's goal of increasing vehicle deliveries to 20 million by 2030, a 10-fold increase from current capacity.
But a weak economy and high interest rates have hit demand for electric vehicles, prompting Tesla and others to cut prices in recent months in an attempt to boost sales.
The carmaker plans to double the German plant's capacity to 1 million vehicles a year, but has not provided an update on how many cars it produces there since March, when it said it had produced 5,000 vehicles in a week - equivalent to around 250,000 annually.
Local authorities said in October they had asked the carmaker to submit further information on how its expansion plans would adhere to nature conservation laws and would then make a decision on whether to approve them, without providing a timeframe.
Tesla also informed workers on Friday that all staff would receive a 4 per cent pay rise from November onwards, with production workers receiving an additional 2,500 euros per year from February 2024 - equivalent to an 18 per cent pay rise in 1-1/2 years.
German union IG Metall said in 2022 that Tesla wages were around 20 per cent below those offered under collective bargaining agreements at other carmakers.