MADRID, June 8 (Reuters) – U.S. electric car maker Tesla ( TSLA.O ) is in talks with leaders of Spain’s Valencia regional government to make an automotive investment, a source close to the the discussions
A spokesman for the Generalitat de Valencia told Reuters it had held meetings and talks with an unidentified company about a “big investment in the automotive sector”, but declined to give further details, citing the confidentiality of the negotiations.
An independent source confirmed that the company in question was Tesla. Spanish business newspaper Cinco Dias cited sources as saying the investment would be a car factory and that its total size could reach 4.5 billion euros ($4.83 billion). Reuters could not confirm the likely size of the investment or the type of investment.
In a statement, the Valencian government denied that there was an agreement sealed with Tesla. Tesla did not immediately respond to a request for comment, while Spain’s central government declined to comment.
Spain is Europe’s second largest car producer and is using the European Union’s COVID pandemic recovery funds to entice carmakers to invest in making both batteries and electric vehicles. The EU plans to phase out thermal cars.
German carmaker Volkswagen announced last year that it would invest 10 billion euros to build a 40 GWh battery plant in Sagunto, near Valencia, with production starting in 2026.
Valencia, in eastern Spain, is also home to a car manufacturing facility for Ford, which plans to start producing electric vehicles there.
Currently, Tesla’s only European car factory, central to Tesla Chief Executive Elon Musk’s stated ambition to beat European market leader Volkswagen ( VOWG_p.DE ), is in the German state of Brandenburg.
It was built last year and as of February this year was producing 4,000 cars a week, the company said.
Musk said in May that the automaker would likely choose a location for a new factory later this year, without revealing.
Also in May, he attended a “Choose France” investment summit in Versailles, near Paris, where he met with French President Emmanuel Macron and said he was confident Tesla would make “significant investments” in France in the future
Tesla has not mentioned investment plans in Spain so far. However, last year Musk suggested in a tweet that Spain should “build a massive solar array…could power all of Europe.”
The Spanish Prime Minister, Pedro Sánchez, responded – also on Twitter, which owns Musk -: “Now is the time. Let’s do it right. Come see it. We welcome investors to Spain.”
($1 = 0.9320 euros)
Reporting by Inti Landauro, Belen Carreno and Joan Faus, Editing by Aislinn Laing, Jan Harvey and Sharon Singleton
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