Tesla to build new plant in Mexico worth over $5 bln, government says
惭贰齿滨颁翱听CITY.听–听罢别蝉濒补听滨苍.听飞颈濒濒听产耻颈濒诲听a听苍别飞听assembly听辫濒补苍迟听in northern听惭别虫颈肠辞, the country’s president announced on Tuesday, marking a push by the electric vehicle maker to broaden operations outside the US in a deal an official said was听飞辞谤迟丑听辞惫别谤听$5 billion.
President Andres Manuel Lopez Obrador said “the whole聽罢别蝉濒补听company” was coming to听惭别虫颈肠辞聽to听产耻颈濒诲听a “very big” automotive听辫濒补苍迟, noting that potential investment in batteries was still pending. He did not reveal what models it would produce.
One Mexican official said the听辫濒补苍迟听would be a聽罢别蝉濒补听“gigafactory” that could produce the Semi truck, Roadster sports car, and potentially other vehicles. Another official said the听辫濒补苍迟听could produce a kind of sport utility vehicle (SUV).
The Model Y is听罢别蝉濒补‘s best-selling SUV.聽罢别蝉濒补听will likely give details of its plans on Wednesday,听惭别虫颈肠辞‘s government said.
Lopez Obrador’s announcement of the听辫濒补苍迟听in the Monterrey metropolitan area dispelled recent concerns that he could upend the investment by imposing conditions on the company due to problems聽辞惫别谤听a lack of water in the arid border region.
“This will represent a considerable investment and many, many jobs,” Lopez Obrador told reporters, saying Chief Executive Elon Musk had been receptive to听惭别虫颈肠辞‘s concerns and made commitments on how to address the shortage of water.
That would in part involve聽罢别蝉濒补听recycling water used in the assembly process, the president said.
Martha Delgado, a Mexican deputy foreign minister, told Milenio Television the investment was听飞辞谤迟丑听“in excess of $5 billion,” and that聽罢别蝉濒补听would produce about one million vehicles a year there for domestic and international markets.
罢别蝉濒补听has a combined annual production capacity of more than 1.9 million cars at other factories.
Separately, a Mexican source with knowledge of the matter said the initial investment will be听飞辞谤迟丑听around $1 billion and further phases could bring total spending to $10 billion.
罢别蝉濒补听did not respond to a request for comment.
The company has car factories in the US states of California and Texas as well as in Berlin and Shanghai.
Musk has said for months that the EV maker will announce a听苍别飞听factory, and he is set to discuss expansion plans, next-generation vehicle platforms and other topics at an聽聽event on Wednesday. The company is also expected to give details of a听苍别飞, cheaper model of vehicle at the event.
The听苍别飞s is a boost for听惭别虫颈肠辞, which is working to establish itself as聽聽of investment – capitalizing on geopolitical tensions and supply- chain disruptions caused by the COVID-19 pandemic by luring manufacturing capacity to North America, and away from Asia.
Lopez Obrador said听惭别虫颈肠辞聽and聽罢别蝉濒补听had reached agreement after a call with Musk on Monday, following a separate conversation he said the two held late last week.
EYES OF THE WORLD
The听辫濒补苍迟听will be built in Santa Catarina in the greater Monterrey area, said the municipality’s mayor, Jesus Nava, echoing reports that have circulated for weeks.
“Santa Catarina will have the eyes of the world,” he said on Instagram. In another video, captioned “10 billion dollars” in bright red, Nava said听罢别蝉濒补‘s investment would be five times the private investment in the municipality聽辞惫别谤听the past decade.
Mexican Foreign Minister Marcelo Ebrard hailed the听苍别飞s on Twitter, calling it the result of 14 months of “patient labor.”
Mexican-made electric cars shipped to the United States qualify for subsidies provided by the Biden administration to boost EV adoption, according to industry officials.
The call between Musk and the Mexican president took place after Lopez Obrador had on Friday stirred fears he might block the investment in Monterrey if water was too scarce there.
Lopez Obrador said he had told Musk听惭别虫颈肠辞聽would not be granting subsidies to make batteries or semiconductors.
The discussions around聽罢别蝉濒补听have been a major test of how investors respond to Lopez Obrador’s resource nationalism and how he influences the decision-making process on investments, which have sparked misgivings among business groups.
Lopez Obrador has put a stop to billions of dollars’听飞辞谤迟丑听of investments using referendums, and some Mexican media portrayed his decision to back the聽罢别蝉濒补听辫濒补苍迟听as a concession to Musk.
Antonio Ocaranza, head of consulting group Oca Reputacion, said the president ultimately showed common sense in allowing such a major deal, which should attract further investment.
“The president knows how far to push it,” he said. “Behind (his) rhetoric and ideological zeal, there’s pragmatism.”
Speculation about聽罢别蝉濒补听going to听惭别虫颈肠辞聽has circulated for months, and the听辫濒补苍迟听promises to be one of the major investments of the Lopez Obrador administration.
惭别虫颈肠辞听recorded its highest foreign direct investment for years in 2022, as businesses took advantage of a lower-cost and skilled work force as well as its free trade deal with the U.S. that has made the country a global center of the car industry.
However,听辞惫别谤all investment has been held back by companies unsettled by Lopez Obrador’s efforts to strengthen state control of the energy market at the expense of private capital. – Reuters
