According to the governor of the Mexican state of Nuevo León, Tesla’s new factory there will cost $5 billion, employ up to 7,000 people, and start producing cars as early as next year.
This week, Tesla revealed plans for its fifth assembly plant worldwide, which will be in Mexico. However, the company didn’t provide many details about the investment, such as how much it would invest, when construction would begin, how many people would work at the factory, or how it would address local water shortages.
The 35-year-old governor of Nuevo León filled in some of the gaps. He claimed that Tesla executives had informed him that the facility, which is located outside of Monterrey, the state’s capital, has the potential to become the largest in the company, producing not just automobiles but also batteries, semiconductors, and software. According to Mr. Garca, Tesla might eventually increase its initial $5 billion investment by two or three times.
He remarked, “I believe these possibilities come along once every 100 years.”
The intentions Tesla has for Mexico might make that nation a key player in the Western Hemisphere’s development of lithium and lithium-ion batteries. The Sonora state in Mexico’s northwest is home to one lithium mine that is now under construction, and the Tesla facility might inspire the nation to take on further endeavors.
Lithium is abundant in Latin America, and Chile is a significant producer of the metal. Bolivia and Argentina, meanwhile, have had less success mining it.
Strongly in favor of oil development, Mexican President Andrés Manuel López Obrador has come under fire for being hesitant to embrace alternative energy. But Mr. Garca, who is not a part of Mr. López Obrador’s party or a major opposition party, declared that he was pleased that the president supported investments in lithium.
Any Tesla factory is unlikely to surpass the company’s facility in Shanghai, which supplies the rapidly expanding Chinese market and exports vehicles to Europe and other Asian nations.
Requests for responses from Tesla were not answered.
Nonetheless, Mr. Garca’s remarks imply that the Tesla factory will be a key component of the business’ operations, enabling the company to produce cars more affordably than it could in the US and better adapt to the escalating competition from storied automakers like General Motors and Volkswagen. The Chevrolet Bolt and the Volkswagen ID.4 are two electric vehicles offered by those businesses that are less expensive than Teslas, and they have plans to release a lot more mass market variants in the near future.
On Friday, VW declared that it would invest $2 billion in a factory close to Columbia, South Carolina, to make pickup trucks and sport utility vehicles under the Scout brand, posing a fresh challenge to Tesla’s hegemony in the electric vehicle industry. The American off-road vehicle brand that International Harvester utilized in the 1960s and 1970s is being revived by the German automaker. Scouts were some of the first mass-produced off-road vehicles, a lucrative market for American cars today. Off-road vehicles are not currently produced by Tesla.
In an investor presentation on Wednesday, Tesla officials announced that the Mexican factory would create a brand-new car with a lower starting price than the Model 3, which starts at $43,000 in the United States. The company hasn’t revealed the vehicle’s design or provided any other information, but its efforts in Mexico may help it reach a bigger audience.
The firm’s investment in Mexico is part of a trend among American manufacturers to lessen their reliance on China while maintaining competitive prices. Mexico is home to plants that make Ford, Chevy, Volkswagen, BMW, and many more makes of vehicles.