The Tesla Gigafactory in Grunheide near Berlin was evacuated on Tuesday after a major power outage.
Police initially said they were "investigating in all directions" about the possible cause but that an electricity pylon had caught fire.
Environmental activists protesting against the expansion of the factory last week said they planned to occupy the nearby forest for a week. The facility is the only factory run by billionaire Elon Musk's electric vehicle company in Europe.
What we know so far
Operator Stromnetz Berlin said there were also outages in the Berlin districts of Muggelheim, Rahnsdorf, and parts of Neukolln. Some 2,000 households are affected.
Tesla said all measures had been taken to secure the production facilities but that, after consultation with the electricity provider EDIS, the company did not expect production to restart quickly.
The fire brigade was called at around 5:15 a.m. (0415 GMT/UTC) and began extinguishing the fire. A police helicopter was deployed after the alarm was raised.
A police spokesperson said they could not comment on a report in the Berliner Zeitung newspaper that the fire had been started by activists.
The spokesperson added that bomb disposal units were called in after emergency services found a sign saying "ordnance buried here." Firefighters were said to be extinguishing the blaze in a field.
What are Tesla's plans for the site?
The automaker aims to expand its plant, which has a capacity of around 500,000 cars a year, but the plan hit a roadblock when local residents voted against down a motion to chop down trees to make way for it.
Tesla wants to double the site's capacity to 100 gigawatt hours of battery production and a million cars per year, allowing it to take a leading role in the European market.
