Tesla arrives in Mexico with a manufacturing facility and a $5 billion investment.

American company Teslatycoon Elon Musk, will build a factory for the production of electric vehicles in the city of Monterrey (North) with an investment of about $5 billion, the Mexican government announced on Tuesday.

The arrival of the company in MexicoHeyco was confirmed early Tuesday by President Andrés Manuel López Obrador, who said he made a deal with Musk during a phone call on Monday.

“We brought in Mexico an investment of more or less than $5 billion to install the largest electric vehicle factory in the world,” Marta Delgado, vice chancellor for multilateral affairs and human rights, later clarified.

The Vice Chancellor traveled to Austin, Texas, to attend Musk’s announcement of his 2023 investment plan.

Tesla It will be installed in the metropolitan area of ​​Monterrey, the capital of the state of Nuevo Leon, constantly suffering from water shortages, but the firm has promised to look into this problem, assured the leftist president.

“This will require significant investment and the creation of many jobs,” Lopez Obrador said at a morning press conference.

Capital to be injected Tesla It will be one of the largest registered in recent years in the country, which in 2022, according to preliminary estimates by the Mexican Foreign Ministry, amounted to $35.292 million in foreign direct investment.

The president paid special attention to the problem of water, a chronic problem in various states in the north of the country. In 2022, Nuevo León authorities were forced to restrict supplies due to a prolonged drought.

Musk “understood the importance of solving the problem of water shortages (…) using recycled water, purifying water even for car paint,” he said.

López Obrador, who said last Friday that he had already had his first conversation with the tycoon, publicly announced the possibility of opening a plant in another region of the country with greater availability of resources.

The concern of the Mexican government is based on the increase in population that this investment could bring.

industrial pole

Teslawhich sold a record 1.31 million vehicles in 2022, has become the latest major automotive company to open a store in Mexicowhere manufacturers such as Ford, General Motors, Volkswagen or BMW already operate, producing cars mainly for the United States.

Companies are seeking access to the US market and the benefits offered by the USMCA free trade agreement between MexicoUSA 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, which is also home to Kia’s South Korean plant.

To alleviate the problem of water shortages, which are exacerbated by increasingly extreme temperatures, the Mexican government is building a new aqueduct and rehabilitating wells to extract fluid.

He also negotiated with companies that have concessions to supply some of the water they use.

The factory you will build Tesla joins 39 enterprises in the automotive sector of the country, including factories for the production of cars, engines and transmissions.

In 2022, automakers produced 3.3 million vehicles and exported 2.8 million units, according to official figures.

ambitious bet

Announcing investment TeslaLópez Obrador said “batteries are under consideration”, though he said he was satisfied with “what has been achieved”.

“We talked about the fact that in the case of batteries and semiconductors we cannot give subsidies that the US government allocates (…). He (Musk) understood this very well, ”he said.

Electric cars like those made Tesla and other companies mainly use lithium in their batteries.

Only 23 countries have found the presence of this mineral, and it is estimated that Mexico It ranks tenth in terms of reserves, according to the Ministry of Energy. Literally on February 20, the government formalized the nationalization of lithium.

This resource is exploited mainly in South America and Australia, with China dominating the supply chain. Mexico It has important deposits in the northern state of Sonora, on the US border.

With clean energy “Sonora Plan” the López Obrador government is aiming to use lithium and has invited assembly companies such as Tesla to the project.

The plan also includes the construction of solar parks, in line with the goal of cutting carbon emissions by 35% from Mexico around 2030.

The situation seems insurmountable as automakers are shifting their product lines to bet on electric vehicles, in line with the United States’ goal of 50% of cars sold in this country by 2030 will be of this type.

For example, the American General Motors plans to begin production of electric vehicles this year at its plant in Coahuila (north).

German BMW announced in early February that it would invest 800 million euros (about $850 million) in Mexico for the production of electric vehicles at its facilities in San Luis Potosi (North), an investment that will also include a plant for the production of high-voltage batteries. (AFP)

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