FRANKFURT -- In its search for a potential factory location in Europe, Tesla examined areas in Germany’s state of North Rhine-Westphalia, Rheinische Post reported on Sunday, citing unidentified people familiar with the topic.

First inspections have taken place, the paper said.

Tesla is also looking at the German state of Lower Saxony, its Economy Minister, Bernd Althusmann, said last week.

In June, CEO Elon Musk called Germany "a leading choice for Europe" in a reply to a tweet asking if it would be wise for Tesla to set up its first European gigafactory in the country.

"Perhaps on the German-French border makes sense, near the Benelux countries," Musk said.

North Rhine-Westphalia, Germany's most populous state, shares borders with the Netherlands and Belgium. Lower Saxony shares a border with the Netherlands.

Europe is projected to be the world's second-largest driver of electric cars in the next decade, trailing only China.

Tesla is racing against time as more established players wake up to the electric future. Customers can already choose between a growing number of battery-powered models from the likes of Mercedes-Benz, Jaguar and Audi.

Tesla spokespeople in Europe were not immediately available for comment.

Bloomberg and Reuters contributed to this report