Tesla to Make Big Investment in Mexico Plant, Government Says
Elon Musk's Tesla will open a plant in northern Mexico, making a significant investment in the Latin American nation, Mexican President Andres Manuel Lopez Obrador announced Tuesday.
The move, which has yet to be confirmed by Tesla, would be a major boost to Mexico's hopes of benefiting from US companies choosing nearby countries over Asia for their manufacturing operations.
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"The plant is going to be established in Monterrey," Lopez Obrador told reporters after speaking with Musk.
The factory was expected to be "very big" and would bring "a considerable investment and many jobs," he added.
He said the US company had promised to address the problem of water scarcity in Monterrey, an industrial powerhouse home to transnational firms a few hours' drive from the US border.
Musk "was very receptive, understanding our concerns," with measures expected to include the use of recycled water, Lopez Obrador said.
Tesla, which already has plants in China and Germany, as well as the United States, would announce more details soon, he added.
The company is due to hold its 2023 Investor Day on Wednesday, live-streamed from its gigafactory in the U.S. state of Texas.
Mexico declared a drought emergency in July last year and authorities in parts of the country, including Monterrey, were forced to ration water use due to depleted reservoirs.
At the same time it hopes to benefit from the "nearshoring" trend of US companies moving their production closer to home instead of to Asia.
Last year, the Latin American nation was invited by the United States to join a multi-billion dollar push to boost semiconductor manufacturing to compete with China.
Mexico sees its lithium deposits as central to its goal of playing a major role in production of batteries for electric cars and other technology.
The automotive industry represented 3.5 percent of gross domestic product (GDP) and 930,000 jobs in 2021, with foreign investment in the sector amounting to $5.3 billion that year.