Elon Musk told staffers at a plant near Berlin that Tesla would build a low-cost car there, according to a report.
Reuters, citing a person with knowledge of the matter, reported that Musk said a 25,000 euro (roughly $27,000) vehicle would be made at the Gruenheide, Germany plant.
Model 3 is listed in the U.S. at $38,990 on its web site, and other Tesla cars are more expensive.
Must last week posted to the X social media platform he owns that he was visiting the plant, after taking part in the artificial intelligence summit in the U.K.
According to the Reuters report, the German workers were told they would receive a 4% pay rise.
Tesla shares jumped 11% last week, part of a broader move higher in stocks as bond yields fell.