Tesla considering building 4.5 billion euro car factory in Spain - report

U.S. electric car manufacturer Tesla (NASDAQ:TSLA) is in talks with the leaders of the regional government of Valencia in Spain to build a car factory, newspaper Cinco Dias reported on Thursday, citing unidentified sources close to the discussions.

The company's total investment in the factory could surpass 4.5 billion euros ($4.83 billion), the newspaper said.

A spokesperson for Valencia's regional government told Reuters it had held meetings and conversations with an unidentified company about a "large automobile investment", but declined to give more details, citing the confidentiality of the negotiations.

Tesla did not immediately respond to a request for comment, while Spain's central government declined to comment.

German carmaker Volkswagen (ETR:VOWG_p) said last year it would invest 10 billion euros to build a 40 GWh battery plant in Sagunto, near Valencia, with production to start by 2026.

Valencia is also home to a car manufacturing facility for Ford, which plans to start producing electric vehicles there.

Spain is Europe's second-largest car producer, and is using European Union COVID pandemic recovery funds to attract carmakers to invest in the manufacture of both batteries and electric vehicles. The EU plans to phase out thermal cars.