Tesla Set to Establish Presence in Mexico with New Factory Announcement

Tesla announces new factory in Mexico

In the next few years, Tesla will join other automakers in expanding their business in Mexico, with the goal of building a new factory there.

According to Mexican President Andres Manuel Lopez Obrador, the electric vehicle company’s factory will be situated in Monterrey, which is about a 3-hour drive from Texas.

On Wednesday, Tesla is scheduled to give a presentation to investors, and it is anticipated that the company will reveal more.

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Mexico had previously voiced concerns regarding the potential impact that the factory’s water requirements could have on the region.

However, Mr Lopez Obrador stated that he had been successful in gaining commitments from Tesla supervisor Elon Musk, which had assisted in easing those concerns.

Mexico is attempting to position itself as a winner as traditional supply networks are disrupted as a result of tensions between the United States and China.

At a press conference on Tuesday, Mr Lopez Obrador stated, “This will represent a considerable investment and many, many jobs.”

In order for automobiles to be eligible for new subsidies that were included in a massive spending plan that was approved to combat climate change last year, US Vice President Joe Biden has placed a priority on made-in-America rules.

However, the regulations make exceptions for Canada and Mexico, which have become increasingly important in the automotive industry as a result of the trend among American companies to look for opportunities to cut costs elsewhere.

This would be Tesla’s third factory located outside of the United States; in recent years, the company has established factories in China and Germany, respectively.

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According to Reuters, the newest Tesla factory represented an initial investment of $1 billion, which has the potential to expand to $10 billion over time.

In an interview with Milenio Television, Martha Delgado, a Mexican deputy foreign minister, stated that the investment was worth “more than $5 billion” and that the factory would manufacture approximately one million vehicles every year.

According to Reuters news agency, an additional Mexican official who requested anonymity stated that the plant will be a Tesla “gigafactory” that will manufacture vehicles, including the company’s truck and sports car.

An inquiry for the company’s opinion regarding its most recent expansion was not met with a response.

Tesla, along with other automakers, is speculating that the number of people purchasing electric vehicles will skyrocket in the coming years as more people opt for environmentally friendly means of transportation.

A few weeks prior to Tesla’s announcement, BMW announced that it would be investing in a factory in Mexico. Tesla’s confirmation of its intentions comes just a few weeks after BMW made its announcement. In this country, Ford also produces its electrified sport utility vehicle (SUV).

The previous year, General Motors made the shocking announcement that it intended to construct a plant for the production of electric vehicles in Mexico. This prompted the United Auto Workers trades union to characterize the decision as a “slap in the face.”

The investments have been carefully monitored in Mexico as a test of the investment environment under the administration of left-wing populist Andres Manuel Lopez Obrador, who was elected in 2018.

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