Tesla is planning to build a new factory in Mexico.
Mexico’s President, Andres Manuel Lopez Obrador, announced that the new plant for the electric car firm would be located in Monterrey, which is around a nine-hour drive from Texas.
Tesla is expected to reveal more details about the new factory during a presentation to investors on Wednesday. Previously, Mexico had raised concerns about how the factory’s water demands could affect the region. However, Mr Lopez Obrador has stated that commitments made by Tesla CEO Elon Musk have helped to alleviate those concerns.
Mexico is trying to position itself as a winner amid the US-China tensions that are disrupting traditional supply chains.
“This will represent a considerable investment and many, many jobs,” Mr Lopez Obrador said at a news conference.
While US President Joe Biden has emphasized “made-in-America” rules for cars, there are exceptions for Canada and Mexico, which have seen their roles in car manufacturing increase as American firms look for ways to reduce costs.
Tesla’s Monterrey factory would be its third outside of the US, following the opening of plants in China and Germany in recent years.
Automakers like Tesla are anticipating rapid growth in electric car purchases as drivers seek greener modes of transportation. BMW recently announced that it would be investing in a factory in Mexico, and Ford manufactures its electric SUV in the country.
General Motors’ decision to build an electric car plant in Mexico last year was criticized by the United Auto Workers trades union. Investments like Tesla’s new factory are being closely watched in Mexico as a test of the investment climate under Mr Lopez Obrador, a left-wing populist who was elected in 2018.
