The automaker of electrical vehicles Tesla is buying into the “Made in Germany” brand. Tesla will set up shop near Berlin in the Eastern German state of Brandenburg.

Elon Musk made the announcement on Tuesday evening, during the Golden Steering Awards, a landmark awards ceremony for the German auto industry.

The promised “Giga Berlin-Brandenburg” factory comes with the promise of thousands of jobs and could lead the way for the modernization of the German auto-manufacturing industry as it transitions towards electrification.

The factory will produce the new Tesla Model Y utility vehicle, as well as powertrains and batteries.

Brandenburg’s premier, Dietmar Woidke, welcomed Musk’s decision noting that the regional government has been trying to make the case with Tesla that “Brandenburg is the place to go.”

The region does not have a tradition in manufacturing and faces social inequality and underemployment. Berlin’s state economy minister Ramona Pop told public broadcaster RBB that the region can expect 6,000 to 7,000 jobs in production alone, not to mention research, suppliers, software, and design.

Germany aspires to create a new value chain for the needs of the 21st-century auto industry, complete with the production of batteries, powertrains and vehicles. The federal government has earmarked billions for public investment in Research and Development in car battery cells to counter Chinese dominance in the sector.

Tesla aspires to benefit from research support. Media reports speculate that German carmakers – BMW, VW, Mercedes – may not be thrilled by the emerging competition for R&D resources at home turf.

Tesla aspires to lead the electric vehicle industry and it is the boldest branching out venture of the company to date. A similar factory will be built in Shanghai, which also comes with the promise of help by the Chinese government.