Samsung SDI Co Ltd said on Tuesday it will build a factory in Hungary to make batteries for electric cars, becoming the latest company to tap into growing demand for the vehicles in Europe.

The South Korean battery maker, a supplier to Tesla Inc, said the plant in Gödöllő, about 40 km (25 miles) from the capital Budapest, will have an annual production capacity of 540 million batteries by the end of 2020.

The facility will employ about 1,000 people and will supply batteries for about 50,000 cars a year, it said in a statement.

The move comes as Europe is pushing for stricter emissions limits to combat climate change, prompting a boom in electric vehicle sales. Major carmakers including Volkswagen, BMW and Jaguar Land Rover have all announced plans to roll out electric models.

Although Samsung SDI has a base in Europe - it makes cathode materials in France - the Gödöllő factory will be its first battery plant on the continent. It currently has two plants in China and one in Ulsan, South Korea.

"With the new factory in Hungary, we will be able to serve our European customers quickly and efficiently," said Jun Young-hyun, president of Samsung SDI's battery business.

The factory will start production in the first half of 2019, the company said.