• Tesla plans to build a new factory in Monterrey, Mexico, which is about three hours away from Texas.
  • The new factory is expected to be a “gigafactory” producing about one million vehicles per year, including Tesla’s truck and sports car.
  • Mexico had concerns about the water demands from the factory but those worries have been eased through commitments made by Elon Musk.
  • The investment is worth over $5 billion and represents a significant job creation opportunity for Mexico.
  • The move is part of a larger trend of carmakers investing in Mexico to reduce costs and position themselves in the global supply chain.
investment mexico

Tesla has confirmed plans to build a new factory in Monterrey, Mexico, its third outside the United States after those in China and Germany. The new Tesla factory is expected to be a “mega-factory” and is expected to produce around one million vehicles per year, including the Tesla truck and Tesla sports car. The initial investment is estimated to be $1 billion, which could grow to $10 billion over time, while Mexican Deputy Foreign Minister Martha Delgado said the investment was worth “more than $5 billion.

The decision comes after Mexico expressed concerns about the factory’s demand for water, but Tesla CEO Elon Musk made commitments that helped alleviate those concerns, according to President Andres Manuel Lopez Obrador. “This will represent a considerable investment and many, many jobs,” López Obrador said at a press conference.

Tesla’s decision comes at a time when Mexico is trying to position itself as a winner amid rising tensions between the U.S. and China, as well as a growing trend of automakers investing in the country to cut costs and move away from traditional supply chains. BMW recently announced it would invest in a factory in Mexico, while Ford produces its electric SUV in the country, and General Motors also announced plans to build an electric car plant in Mexico last year.

Monterrey is undoubtedly becoming an attractive hub for business, especially for the automotive industry. The investments have been closely watched as a test of the investment climate under Mr. Lopez Obrador, a leftist populist who was elected in 2018. The move is expected to represent significant job creation and economic growth for Mexico, as well as a shift toward greener modes of transportation as more drivers opt for electric vehicles.

source: BBC News