Tesla's (TSLA.US) first phase of expansion at its Berlin factory has been approved.

Germany's environment ministry on Tuesday approved the first phase of a three-stage expansion of Tesla's (TSLA.US) new factory near Berlin, a major step toward doubling the company's production capacity.

The approval covers the construction of infrastructure including storage facilities, battery testing laboratories and logistics areas. All construction will take place on land already owned by Tesla.

Tesla plans to raise the annual production capacity of its Berlin factory to 1 million vehicles from 500,000, making it the largest car factory in Germany, surpassing Volkswagen's Wolfsburg headquarters. But the plan has been met with fierce opposition from local residents.

The Berlin factory, Tesla's first manufacturing plant in Europe, began operations in March 2022. It currently produces the Tesla Model Y, as well as batteries, battery packs, powertrains and seats. The company has invested about €4bn in the project and employs nearly 12,000 people in the region. Tesla said the Berlin factory features advanced manufacturing processes and is designed to be the most sustainable and efficient plant it has ever built.