Tesla Inc. (TSLA  ) has purchased property in Gruenheide, Germany, for its latest Gigafactory. The new factory will be Tesla's first European factory and is being called by some as a challenge to the deeply entrenched German automotive industry. The move has also garnered protests due to environmental concerns.

Tesla's Board of Directors signed off on the land purchase on Saturday. The provincial government had approved the deal previously; the Board's decision has finalized the deal. The property is currently valued at €40.91 Million, but the number can be adjusted if the land value changes. The leadership of Gruenheide, which will host the factory, has expressed excitement over the purchase, noting that the investment will bring significant economic benefits to the town. "It gives young people with a good education or a university degree the possibility to stay in our region-an option that didn't exist in past years." Said mayor Arne Christiani. The town had previously lost out on a similar opportunity when BMW (FWB: BMW) opted for Lepzig over Gruenheide for a factory.

The plant is slated to produce a wide array of Tesla products, from Batteries and powertrains to the Model 3 and any future models the company produces. The property plans currently include the manufacturing facility, several plots for future expansion, as well as a large logistics yard. Gruenheide has been considered an optimal location for Tesla due to its proximity to the Autobahn and several major train lines.

Tesla's move is being considered by some to be a brazen move to challenge the well-established automakers that have held market dominance in Germany and have a significant presence throughout Europe. German automakers had previously dismissed the American automaker and hadn't considered the company much of a threat until the Gruenheide Gigafactory was announced. Elon Musk's drive to establish a foothold in Germany shocked German automakers; his November announcement of the factory plans sent shockwaves throughout the country. "Elon Musk is going where his strongest competitors are, right into the heart of the global auto industry," says Metzler Bank analyst Juergen Pieper. Tesla's move challenges German automotive titans such as BMW, Volkswagen (FWB: VOW), and Daimler (FWB: DAI).

The news surrounding Tesla's move isn't all optimistic, however. To construct the factory, Tesla will need to cut down a large swath of forest in a move that has some residents up in arms. Protestors have been present at the future factory site in a peaceful demonstration as crews scour the site for World War II-era munitions, which may be present due to the high volume of ordnance used against Germany during the latter years of the war. Protestors voiced concerns over the deforestation of the site, which is home to an endangered species of bat that Tesla will have to relocate. Protestors also voiced concerns over potential water contamination. In response to the public outcry, Tesla has opened a public affairs office for concerned citizens to voice their concerns. The company has voiced its receptiveness to input and stated that it wishes to "embrace the new neighbors."