Mexican President Andrés Manuel López Obrador announced on Tuesday that Tesla has committed to building a major plant in Monterrey, Mexico's industrial hub in the north. The announcement followed phone calls the President had with Tesla CEO Elon Musk on Friday and Monday.
Tesla's Third Plant Outside the US
The new plant in Monterrey would be Tesla's third plant outside the US, following plants in Shanghai and Berlin. López Obrador had previously ruled out building a plant in the arid northern state of Nuevo Leon, where Monterrey is the capital. However, Musk's company offered commitments to address the President's concerns about water shortages in the region, including using recycled water in the manufacturing process of electric cars.
No Information About the Plant's Production and Investment Amounts
López Obrador did not specify what the plant would produce, nor did he give a dollar amount for the investment. He did, however, say that the plant would be a significant investment that would generate many jobs. López Obrador said the company planned to release more details on Wednesday.
Monterrey is Highly Industrialized and Close to the US Border
Monterrey is a highly industrialized city close to the US border and had long been considered the frontrunner for any Tesla investment. However, the city suffered severe water shortages in 2022, leading the President to rule out new plants there. Despite this, Musk's proposal appears to have overridden the President's stance.
Southern States Disappointed
The announcement was a disappointment for more water-rich southern states that had begun jockeying for the Tesla plant after López Obrador's comments last week.
Tesla is Expected to Announce Plans for Its "Gen 3" Vehicle Platform
Tesla is expected to announce plans for its "Gen 3" vehicle platform on Wednesday at its annual investor day at a factory near Austin, Texas. Musk previously floated the idea of building a $25,000 electric vehicle, which would cost about $20,000 less than the current Model 3, Tesla's least-expensive car.
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