New Tesla factory in Mexico will be the largest electric car plant in the world

Elon Musk, founder of Tesla, confirmed a new factory will be built in Santa Catarina, in the  northern state of Nuevo León, Mexico.

Photo: Twitter @Tesla

With a 5 billion dollar investment, Mexican President, Andrés Manuel López Obrador, and the state governor, Samuel García, welcomed the news and assured  that water consumption, a controversial factor in the project,  won’t be an issue.

As confirmed by Martha Delgado (in the image with Musk), Undersecretary for the Ministry of Foreign Affairs, the Tesla plant in Mexico will be the largest electric vehicle factory in the world.

Photo: Twitter @samuel_garcias

Jesus Nava, the mayor of Santa Catarina, said in an interview that Tesla is purchasing the site from private owners and that the land spans nearly 4,200 acres, more than double the size of Mexico City’s international airport.

In a strategy to expand its operations, the technology magnate announced that the location of his new plant will offer a strategic connection, as it borders with the United States and it’s a three-hour drive away from Texas, where another Tesla plant is located.

Photo: Twitter @Tesla

According to statements by Musk himself, the Mexico plant will be part of the expansion of the brand, so it will be supplementary to the rest of its factories located in the United States, China and Europe.

During Investor Day 2023 it was confirmed that the new Tesla factory will be in charge of producing Tesla's next-generation cars. Among them, the supposed new 'economic' model to compete for a more affordable market.

Photo: Twitter @Tesla

"The richest man in the world trusted Nuevo León, Mexico, for his new gigafactory and his next-generation vehicle. The future is bright.", the governor of Nuevo León twitted.

Photo: Twitter @samuel_garcias

Along with the first rumors about the factory, the first controversies also arose, since it had been the president of Mexico himself, who had commented that the plant could be installed in another state, due to the lack of water present in Nuevo León.

However, according to local media, Musk made several proposals to the Mexican government to solve the water problem. And after 14 months of negotiations, the Mexican president officially announced the construction of the factory.

“The plant is going to be established in Nuevo León, with a series of commitments to face the problem of water scarcity,” declared Obrador.

Photo: Twitter @lopezobrador_

Although details about these strategies were not disclosed, local media assured that among the clauses agreed for the construction of said factory, a water protection plan stands out.

On the other hand, the possibility of selling lithium as a raw material for the manufacture of batteries for said electric cars was also raised, taking into account the important lithium reserves that the country has and that Obrador promised to nationalize so that it would not be exploited by foreigners.

“Lithium belongs to the nation”, said Obrador who promised to nationalize such natural resources, "so that they cannot be exploited by foreigners, neither by Russia, nor by China, nor by the United States," he said during his visit to the state of Sonora a few weeks ago.

Photo: Twitter @lopezobrador_

However, after the confirmation of the new Tesla factory, Obrador stated during his morning program: "Lithium belongs to the Mexicans, but if the raw material is bought, if the battery plants are put in Sonora, if you give work to the Sonorans, to the Mexicans, an agreement is reached".

For now, the implementation of the manufacture of batteries for electric cars is not clear. It is an investment that is expected to be made in the future in an exchange of natural resources for investment and technology.

Photo: Twitter @Tesla

What is clear is that with the arrival of Tesla, "Mexico reaffirms its leadership position in the manufacture and export of vehicles to the world," said José Zozaya, president of the Mexican Association of the Automotive Industry, to the BBC.

For now, neither Tesla nor Elon Musk have offered figures regarding the number of jobs that the largest electric car factory will represent. However, government sources assured that it is estimated that between 6,000 to 10,000 jobs will be generated.

An economic impact that would initially and directly affect Santa Catarina, a population that exceeds 300,000 inhabitants, according to the 2020 census of the National Institute of Statistics and Geography (INEGI).

In addition to Tesla, there are other giants in the sector such as BMW, General Motors or Ford that have also launched eight factories in Mexico for the production of electric vehicles.

According to information from El País, Mexico is positioned as the leader in the commercialization of electric cars in Latin America, surpassing Brazil and Colombia, with the United States being the main export destination.

"The arrival of Tesla would be a confirmation of the great value of Mexican skilled labor, proof that Mexico is a country where you can invest in a safe and stable way and that the conditions offered will be respected," declared José Zozaya.

Photo: Twitter @samuel_garcias