Tesla To Invest Around $5 Billion In Mexico Plant

A top government official said on Tuesday that US electric vehicle manufacturer Tesla will spend approximately $5 billion building a sizable new facility in the city of Monterrey in northern Mexico. The decision, which Tesla has not yet confirmed, would be a significant boost to Mexico's prospects of profiting from American businesses picking surrounding countries over China for their manufacturing operations. The largest electric car manufacturing in the world is being built in Mexico thanks to a $5 billion investment, according to Martha Delgado, undersecretary for global relations and human rights. Tesla plans to establish a facility in Monterrey, in northern Mexico, roughly 200 kilometres (120 miles) from the US border, according to Mexican President Andres Manuel López Obrador. According to him, the factory would bring "a significant investment and many employment" and be "quite substantial." López Obrador stated that Tesla would provide further information on Wednesday, including resolving the issue of water shortages in Monterrey, a city with a thriving industrial sector and a number of multinational corporations. Elon Musk, the head of Tesla, "was quite responsive, understanding our worries" in conversations, the president said, adding that steps are anticipated to include the use of reclaimed water.

Mexico declared a drought emergency in July of last year, and because of low reservoirs, officials in several areas of the nation, notably Monterrey, were obliged to regulate water consumption. On Wednesday, Tesla, which currently operates facilities in China, Germany, and the United States, will host its 2023 Investor Day via live streaming from its gigafactory in Texas. In the market for electric vehicles, Tesla is up against an increasing amount of competition from Chinese manufacturers as well as more established automakers like General Motors and Volkswagen. Mexico wants to play a significant role in the manufacture of batteries for electric automobiles and other technology, and it sees its lithium reserves as essential to achieving this aim. A plan to state-control the metal's exploration and extraction was approved by MPs last year. The second-largest economy in Latin America after Brazil, and the home of American, European, and Asian manufacturers, Mexico already has a significant car sector. According to the Mexican Automotive Industry Association's most recent data, Mexico manufactured three million automobiles in 2021, making it the seventh-largest automaker in the world. According to the group, the automobile industry contributed 3.5 percent of the nation's GDP in 2021, supported 930,000 employment, and attracted $5.3 billion in foreign investment. BMW, a German automaker, has disclosed a $870 million commitment to manufacture electric vehicles in Mexico.