The top official in the German state where Elon Musk built his Tesla gigafactory - the only one in Europe - has backed the company's controversial use of water resources in the region.

"We are well advised to use water sparingly. But Tesla is the wrong person to criticize for this," Brandenburg Premier Dietmar Woidke told dpa.

"The company does not want to use any additional water in production and intends to fully recycle its industrial waste water in future," Woidke, who is a member of Chancellor Olaf Scholz's Social Democratic Party (SPD), said.

Tesla opened its giant car plant in Grünheide, east of Berlin, more than two years ago. The move was considered a coup and netted the region, which was part of the former East Germany, around 12,000 jobs.

Tesla wants to increase production and expand the site. Since its construction, there have been concerns from environmentalists and local residents, partly because the plant is located in a water protection area.

But Woidke isn't worried. "If we want to secure our prosperity, we also need a strong economy," he said.

State leader says Tesla is a "huge gain"

Brandenburg's head of state sees the multibillionaire Musk's company as a role model.

"Tesla is a huge gain for the capital region and shows that we can get investments off the ground very quickly under the current conditions in Germany," said Woidke. "Mr Musk has been instrumental in driving this investment forward, and we are grateful for that."

Woidke did have one criticism: "I would have liked to have seen a little more activity and transparency from the company in recent years."