The car factory is to be built near the company’s headquarters in Wolfsburg, Europe’s largest car company announced on Tuesday evening.

The supervisory board, however, still has to give its final approval to the decision.

The project is considered one of the decisive points of the investment strategy for the next five years.

According to the information provided, the Trinity project will be housed in a separate production facility, and a type of “second Wolfsburg plant” is planned.

“The new factory is to be built on a greenfield site outside the factory fence,” the company explained.

Various locations around Wolfsburg are being considered. A final decision is to be made by December 9, when a planning round is to take place.

According to estimates from company circles, the construction could cost at least several hundred million euros.

Trinity is expected to be fully operational in 2026. It is a completely redesigned vehicle system that will use the latest electric drives as well as largely self-programmed software, networking and autonomous driving technologies from VW.

“Competitive pressure is increasing. We have to make Wolfsburg fit for the future now,” VW brand chief Ralf Brandstaetter said.

US electric car company Tesla is current building its new factory on the outskirts of Berlin.