Tesla reportedly resumed cutting down trees to clear land in in Gruenheide, Germany for its first European car and battery factory after environmentalists lost a court case.

"Tree clearance is proceeding in an orderly manner," Tesla told Reuters while a spokeswoman for the automaker said in a statement there were no environmentalists holding up the process.

Reuters noted Tesla plans a production start in 2021 but environmentalists had exploited legal loopholes in the planning process to halt tree felling until an environmental audit was finalised to assess if any rare species could be endangered.

But a local court last Thursday rejected environmentalist efforts to stop the land being cleared of trees, adding its ruling could not be appealed.

The court's decision was welcomed by Germany's industry association BDI and economy minister Peter Altmaier, Reuters said.

Lawmakers from Germany's pro-business Christian Democrat and Free Democrat parties had warned that the legal battle waged against the Gigafactory would inflict serious damage on Germany's image as a place to do business, the news agency reported.