The American company Tesla, owned by magnate Elon Musk, will install an electric car factory in the city of Monterrey (north), with an investment of some US$ 5,000 million, the Mexican government announced on Tuesday.
The firm’s arrival in Mexico was confirmed early Tuesday by President Andrés Manuel López Obrador, who said he had sealed the agreement with Musk during a telephone conversation on Monday.
“We brought to Mexico an investment of more or less US$ 5,000 million for the installation of the largest electric vehicle plant in the world”, Martha Delgado, vice chancellor for Multilateral Affairs and Human Rights, later explained.
The vice chancellor traveled to Austin (Texas) to attend Musk’s announcement about his investment plan for 2023.
Tesla will be installed in the metropolitan area of Monterrey, capital of the state of Nuevo León, continuously affected by water shortages, but the firm promised to consider this problem, the leftist president assured.
“This is going to mean considerable investment and many jobs.”, highlighted López Obrador in his morning press conference.
The capital that Tesla will inject will be one of the largest registered in recent years in the country, which in 2022 totaled US$35.292 million in foreign direct investment, according to preliminary estimates by the Mexican Foreign Ministry.
The president was emphatic on the issue of water, a chronic problem in various states in the north of the country. In 2022, the Nuevo León authorities were forced to ration the supply due to a prolonged drought.
Musk”understood the importance of addressing the problem of water scarcity (…) with the use of recycled water, water treatment even for car paint”, he commented.
López Obrador, who revealed that he had already had a first talk with the magnate last Friday, had publicly raised the possibility that the plant would be established in another region of the country with greater availability of the resource.
The concern of the Mexican government is based on the population increase that these investments could bring.
industrial pole
Tesla, which sold a record 1.31 million cars in 2022, is the most recent major automotive company to settle in Mexico, where manufacturers such as Ford, General Motors, Volkswagen or BMW already operate, producing vehicles mainly for the United States.
Companies seek access to the US market and the advantages offered by the USMCA free trade agreement between Mexico, the United States and Canada.
For this reason, many of them are located in areas close to the border such as Nuevo León, a state with a strong industrial vocation that is also home to a South Korean Kia plant.
To mitigate the problem of the lack of water, which is aggravated by increasingly extreme temperatures, the Mexican government is building a new aqueduct and rehabilitating wells to extract the liquid.
It also agreed with companies that have concessions to deliver part of the water they use.
The plant that Tesla will build is added to the 39 that the automotive sector already has in the country, including vehicle, engine and transmission factories.
In 2022, automakers produced 3.3 million vehicles and exported 2.8 million units, according to official figures.
ambitious bet
When announcing Tesla’s investment, López Obrador said that “the matter of the batteries was pending,” although he said he was satisfied “with what was achieved.”
“We talked about how we could not, in the case of batteries, semiconductors, give the subsidies that the US government is allocating (…). He (Musk) got it perfectly,” he noted.
Electric cars like those produced by Tesla and other companies use mostly lithium in their batteries.
Only in 23 countries has the presence of this mineral been detected and it is estimated that Mexico occupies the tenth position in reserves, according to the Ministry of Energy. Just on February 20, the government formalized the nationalization of lithium.
This input is exploited in South America and Australia, mainly, and China dominates the supply chain. Mexico has important deposits in the northern state of Sonora, on the border with the United States.
Through the clean energy “Plan Sonora”, the government of López Obrador seeks to exploit lithium and has invited assembly companies such as Tesla to the project.
The plan also involves the construction of solar parks in line with the goal of a 35% reduction in Mexico’s carbon emissions by 2030.
The situation seems unbeatable since the automakers are changing their production lines to bet on electric cars, in line with the United States’ objective that 50% of the cars sold in that country by 2030 be of this type.
For example, the American General Motors plans to start producing electric cars this year at its plant in Coahuila (north).
The German BMW announced at the beginning of February that it would invest 800 million euros (about US$ 850 million) in Mexico to produce electric cars at its facilities in San Luis Potosí (north), an investment that will also include a high-voltage battery plant .
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
