Tesla will build a plant in Mexico, the president announced after the meeting with Musk

Tesla will build a plant in Mexico, the president announced after the meeting with Musk

Tesla will build a plant in Mexico, announced after meeting with Musk president

Mexican President Andrés Manuel López Obrador at a press conference on February 28, 2023.

Mexico/Austin (USA) – American carmaker Tesla will build a plant in the city of Monterrey in the Mexican state of Nuevo León. This was announced by Mexican President Andrés Manuel López Obrador, who spoke by phone with the head of the car company Elon Musk about the construction conditions on Monday. Foreign media reports about it. Monterrey is an industrial center in northeastern Mexico.

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In the past, the president opposed the construction of the plant in the state of Nuevo León. There is a lack of water in the region, and the president said last week that if there is not enough water in the region, Tesla will not build there. But now, according to the president, the company has offered a series of binding proposals to solve the water problem.

“He was very accommodating, he understood our concerns and accepted our proposals,” said AMLO, as the Mexican president is referred to by the initials of his name in Mexico is commonly called. “I want to thank Mr. Elon Musk for being very respectful, attentive and understanding the importance of solving the problem of water scarcity,” the president added.

The mentioned commitments include the use of recycled water in the entire production process of electric cars, including painting. The president said more details would be announced on Wednesday, when the automaker holds an investor day. According to the president, further commitments will be announced next week.

Tesla has been interested in building a plant in Mexico for a long time, but has not yet been able to agree on a specific location. The president's announcement thus ends weeks of speculation about where in Mexico the company will eventually begin construction, Bloomberg reported.

Last June, the authorities of the state of Nuevo León had to limit access to water because the dams threatened to run dry. The Mexican government has even asked industries and farmers in Monterrey to offer some of their water to the population. The president then called on companies in the area to reduce water consumption.

Tesla has already run into concerns about water shortages when planning one of two new car factories it opened last year. While Musk laughed off the issue in August 2021, it ultimately contributed to the delay that caused the factory to begin production seven months later.

The announced factory would be Tesla's first plant south of the United States border and would be part of Musk's plans to expand global manufacturing. It would join new plants in Austin, Texas, and in the German capital of Berlin.

The Mexican president said that his country would not be able to provide subsidies for batteries or semiconductors comparable to the incentives that the US government is now providing. The uncertainty about the location in Mexico has sparked a marketing battle between individual states, whose representatives have tried to attract investment to their state.

The production of electric cars is developing in Mexico mainly thanks to the continued demand for these vehicles from abroad. For example, the German car manufacturer BMW announced a new investment for 800 million euros (almost 19 billion CZK) in the Mexican state of San Luis Potosí. Other car companies, such as the American General Motors, also plan to expand the production of electric cars in Mexico.