Tesla received conditional approval Friday for a factory in Germany, according to the Brandenburg state environment office.
The factory, which the local government referred to as "a great success," has an annual maximum production capacity of 500,000 vehicles, located in the state of Brandenburg in northeastern Germany near Berlin.
The conditional approval is subject to an objection period by the public, in addition to final inspections amid air and water pollution control.
The US electric carmaker wants to expand globally as the world moves toward electric vehicles.
After Tesla opened a factory in Shanghai, China, in late 2019, it also plans to open one in the US state of Texas later this year.
With crude oil prices recently rising to record levels, automakers have ramped up efforts to manufacture electric vehicles.
However, the global auto industry continues to be hampered by a major chip crisis since the early months of the coronavirus pandemic.