U.S., Nov. 13 -- Tesla will build its first European factory and design centre near Berlin and compete with local rivals Audi, BMW and Mercedes as they prepare to launch electric vehicles.

Tesla's Chief Executive Elon Musk made the announcement about his company's Gigafactory at an automotive awards ceremony in Germany this week. Stating that "Berlin rocks!" he said that Tesla's new plant would make batteries, powertrains and cars - beginning with the Model Y sports utility vehicle.

"Everyone knows German engineering is outstanding for sure. You know that is part of the reason why we are locating Gigafactory Europe in Germany,"he said.

The news provides a boost for Germany as a centre for manufacturing after BMW and Mercedes chose to b...