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Tesla was rumored to build a new gigafactory in Mexico since last December. Quite often, Mexican officials would make statements about a potential deal. Until now, these statements have proved as nothing more than wishful thinking. Still, Mexico president Lopez Obrador confirmed on Tuesday that Tesla would build a new plant in Monterrey.
Tesla is actively scouting for new locations to build gigafactories, a crucial step to scale production to extreme levels. Governments tried to lure Elon Musk to invest in their countries, but no decision has been announced. India, Indonesia, South Korea, Canada, and Mexico are just a handful of countries that would offer Tesla preferential conditions to tip the balance when establishing new production facilities.
Mexico was probably more active than other countries in this endeavor, considering that Elon Musk has visited the country and spoken with officials about a possible gigafactory location. This has made local politicians go crazy, making statements about done deals that they would deny the next morning. A presidential spokesperson insisted last month that Tesla would build not one, but two gigafactories in the country. One would be next to New Mexico’s newly opened Felipe Angeles airport (AIFA), so Tesla could ship its products by air. You understand now that such declarations must be taken with a grain of salt.
Another location discussed since last December was less of a far-fetched possibility. We’re talking about Monterrey, located in the northern state of Nuevo Leon. The city is close to the U.S. border and less than 400 miles (640 km) away from Giga Texas. The location makes sense, although there might be a bit of a problem. Just as in Germany, the water reserves in the region are scarce.
Still, an official confirmation shows that Tesla is building its next gigafactory in Monterrey. Following two long phone conversations between Tesla CEO Elon Musk and Mexico’s president Lopez Obrador, Tesla has been granted permission to set up business in Nuevo Leon. On Tuesday, Obrador made the official announcement, saying the deal represents a “considerable investment and many, many jobs” for Mexico.
Lopez Obrador said that Musk understood the water scarcity problem in the region and was willing to make a series of commitments as part of the deal. There is no further information, although Tesla is expected to offer more details about the agreement on Wednesday, possibly during the Investor Day event. If the deal is real, Tesla may have chosen the best location for a gigafactory that would benefit from the low-cost, high-skilled workforce in the Mexican auto industry.
Initial rumors from December 2022 indicated that Tesla would start with a $1 billion investment in the new gigafactory. The plan was to produce components used in Tesla’s nearby production site in Austin. Intriguingly, Tesla officials said that Tesla would eventually start making an affordable car in Mexico. Tesla is expected to announce the Gen-3 platform plans during Investor Day, and a production facility in a place with low labor costs sounds exactly what Tesla needs.
Mexico was probably more active than other countries in this endeavor, considering that Elon Musk has visited the country and spoken with officials about a possible gigafactory location. This has made local politicians go crazy, making statements about done deals that they would deny the next morning. A presidential spokesperson insisted last month that Tesla would build not one, but two gigafactories in the country. One would be next to New Mexico’s newly opened Felipe Angeles airport (AIFA), so Tesla could ship its products by air. You understand now that such declarations must be taken with a grain of salt.
Another location discussed since last December was less of a far-fetched possibility. We’re talking about Monterrey, located in the northern state of Nuevo Leon. The city is close to the U.S. border and less than 400 miles (640 km) away from Giga Texas. The location makes sense, although there might be a bit of a problem. Just as in Germany, the water reserves in the region are scarce.
Still, an official confirmation shows that Tesla is building its next gigafactory in Monterrey. Following two long phone conversations between Tesla CEO Elon Musk and Mexico’s president Lopez Obrador, Tesla has been granted permission to set up business in Nuevo Leon. On Tuesday, Obrador made the official announcement, saying the deal represents a “considerable investment and many, many jobs” for Mexico.
Lopez Obrador said that Musk understood the water scarcity problem in the region and was willing to make a series of commitments as part of the deal. There is no further information, although Tesla is expected to offer more details about the agreement on Wednesday, possibly during the Investor Day event. If the deal is real, Tesla may have chosen the best location for a gigafactory that would benefit from the low-cost, high-skilled workforce in the Mexican auto industry.
Initial rumors from December 2022 indicated that Tesla would start with a $1 billion investment in the new gigafactory. The plan was to produce components used in Tesla’s nearby production site in Austin. Intriguingly, Tesla officials said that Tesla would eventually start making an affordable car in Mexico. Tesla is expected to announce the Gen-3 platform plans during Investor Day, and a production facility in a place with low labor costs sounds exactly what Tesla needs.
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