Porsche has given the green light to build an all-electric car aimed at challenging Tesla’s dominance of the battery-powered sportscar market.

The German firm said it would create more than 1,000 jobs via a €700m (£500m) investment in new facilities and assembly line.

Porsche’s Mission E, revealed as a concept car earlier this year, is due to go on sale by the end of the decade.

The four-door car’s range will be 310 miles, and hit 62mph in 3.5 seconds.

This pitches the Mission E – a name unlikely to stay once the launch date nears – against Tesla’s powerful Model S.

Porsche is owned by Volkswagen Group, currently embroiled in ‘dieselgate’, which has said it would invest in a range of all-electric and hybrid vehicles across its brands over the next few years.

Dr Oliver Blume, chairman of Porsche’s executive board said putting Mission E into full development was the “beginning of a new chapter in the history of the sports car”.

The Social Magazine business correspondent Theo Leggett said it seemed clear that the Mission E was a response to the rise of Tesla, the Silicon Valley brainchild of billionaire Elon Musk.

“The fast and luxurious Tesla Model S has already redefined what you can expect from an electric car, although the company is yet to make a profit. Now Porsche is joining the party. Battery power is suddenly looking rather fashionable,” our correspondent said.

Porsche unveils its Mission E concept

Porsche said the car would be charged via an 800-volt unit specially developed for the vehicle, which is twice as powerful as today’s quick-charge system.

The lithium-ion batteries integrated within the vehicle floor will have enough power for 80% of its mileage range range after 15 minutes charging, Porsche said in a statement. The vehicle can optionally be ‘refuelled’ wirelessly by induction via a coil set into a garage floor.

The four-seat car features energy storage technology derived from the Le Mans-winning Porsche 919 Hybrid race car.

The €700 Mission E investment was part of a €1bn spending plan on new facilities announced by Porsche on Friday.