According to a source close to the discussions, U.S. electric car manufacturer Tesla is reportedly in talks with the leaders of the regional government of Valencia in Spain for a potential automotive investment. While a spokesperson for Valencia’s regional government confirmed holding meetings and conversations with an unidentified company regarding a “large automotive investment,” they declined to provide further details due to the confidentiality of the negotiations.
A separate source has indicated that the company in question is Tesla. Spanish business newspaper Cinco Dias cited sources mentioning that the investment could potentially involve the establishment of a car factory, with a total size reaching 4.5 billion euros ($4.83 billion). However, Reuters has been unable to confirm the likely investment size or the specific type of investment.
The Valencian government issued a statement denying the existence of a sealed agreement with Tesla. Tesla itself has not responded to requests for comment, and Spain’s central government has declined to provide any comments.
Spain, being Europe’s second-largest car producer, is leveraging European Union COVID pandemic recovery funds to attract investments from car manufacturers for the production of batteries and electric vehicles. The European Union plans to phase out thermal cars.
In a similar vein, German carmaker Volkswagen announced last year its intention to invest 10 billion euros in the construction of a 40 GWh battery plant near Valencia, with production set to commence by 2026.
Valencia already hosts a car manufacturing facility for Ford, which has plans to start producing electric vehicles there.
Currently, Tesla’s only European car factory, vital to CEO Elon Musk’s goal of surpassing European market leader Volkswagen, is located in the German state of Brandenburg. The facility, constructed in 2020, was reported to be producing 4,000 cars per week as of February 2023.
Musk stated in May that Tesla would likely select a location for a new factory by the end of the year, but did not specify where. Additionally, during a “Choose France” investment summit in May, Musk met with French President Emmanuel Macron and expressed confidence in making “significant investments” in France in the future.
While Tesla has not mentioned any plans to invest in Spain thus far, Musk did suggest in a tweet last year that Spain should “build a massive solar array… Could power all of Europe.”
In response to Musk’s tweet, Spain’s Prime Minister Pedro Sanchez, also on Twitter, welcomed investors to Spain, stating, “Time is now. Let’s get it right. Come and see. We welcome investors in Spain.”
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