BERLIN, March 22 — US electric car pioneer Tesla will today inaugurate its new "gigafactory” near Berlin, with CEO Elon Musk flying in to present customers with the first Model Y vehicles made in Europe.

"Excited to hand over the first production cars made by Giga Berlin-Brandenburg tomorrow!” Musk tweeted on the eve of the red ribbon ceremony.

The opening caps an arduous two-year approval and construction process that saw Tesla run into a series of administrative and legal hurdles, including complaints from locals about the site’s environmental impact.

Having started construction at its own risk, Tesla finally won the formal go-ahead from regional authorities to begin production earlier this month.

The "gigafactory” in Gruenheide, in Germany’s eastern state of Brandenburg, is Tesla’s first production site in Europe, and local officials are hoping it will help the region position itself as a hub for electric vehicle production.

Tesla aims to eventually employ some 12,000 workers at the site who will churn out around 500,000 Model Y cars annually.

The first 30 of the all-electric, compact SUVs to roll off the assembly line will be delivered to customers during today’s ceremony.

German Chancellor Olaf Scholz and Economy Minister Robert Habeck will also be in attendance.

Tesla’s arrival is likely to jolt Germany’s flagship auto industry, setting the stage for fierce competition with rivals Volkswagen, BMW and Mercedes-Benz as they pivot from traditional engines to cleaner electric vehicles.

Tesla’s focus on Europe comes as the continent grapples with sky-high energy costs that have sent petrol prices soaring, prompting drivers to take a closer look at electric alternatives.

The "gigafactory” near Berlin is "one of the biggest strategic endeavours for Tesla over the last decade and should further vault its market share within Europe over the coming years as more consumers aggressively head down the EV path,” analysts at investment firm Wedbush said.

But as with other carmakers, shortages of raw materials and supply chain disruptions linked in part to Russia’s invasion of Ukraine are weighing on Tesla. 

Musk said last week that the company was facing "significant recent inflation pressure”. — AFP