Tesla CEO Elon Musk described the Gigafactory in Nevada as a product, calling it the “Gigafactory 1” – implying there will eventually be a “Gigafactory 2”. This second battery factory could end up being built in Germany according to comments made earlier today by Vice-Chancellor and Economy Minister Sigmar Gabriel. Gabriel was speaking at an event at a Mercedes-Benz factory in Rastatt, Germany, and he confirmed (via Bloomberg) that government officials are in contact with Elon Musk over the possibility of building a battery factory in the country.

The Vice-Chancellor said that he expects Tesla to seek public funds like they did with the Nevada factory.

It makes sense for Tesla to invest in production capacity in Europe considering the continent is now a bigger market for the company than North America. Germany hasn’t been an important driver in this demand shift even though Model S sales in the country are up 104%, but the prospect of a large investment could help the company’s image in a market dominated by local automakers.

Tesla also sees Germany as an important market for its ‘Tesla Energy’ division. The company recently hired a top executive from the solar industry to lead the energy storage division in Europe and Africa.

Last month, the company moved its production line of Tesla Energy products to the Gigafactory in Nevada, where there’s plenty of room to grow. The current structure of the ‘pilot plant’ reportedly only represents 14% of the total 13.6 million square feet it will reach for its planned capacity of 50 GWh.

Gabriel didn’t offer any timeline if both parties were to go forward with such a project, which currently appears to only be in the early phases of negotiation.

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