New factory to be built by Tesla in Mexico

Tesla intends to construct a new facility in Mexico, joining other automakers in expanding their footprint south of the United States border.

In his remarks at a news conference on Tuesday, President of Mexico , Mr. Lopez Obrador added, “This will represent a considerable investment and many, many jobs”.

US President Joseph Biden has emphasised made-in-America requirements for automobiles to be eligible for new subsidies contained in a large spending plan approved last year to combat climate change.

The laws, however, provide exceptions for Canada and Mexico, whose role in automobile manufacturing has grown as US firms go abroad to decrease costs.

This would be Tesla’s third facility outside the United States, following recent openings in China and Germany.

According to Reuters, the newest Tesla factory required an initial investment of $1 billion, which might increase to $10 billion over time.

A Mexican deputy foreign minister, Martha Delgado, told Milenio Television that the investment was “in excess of $5 billion” and that the factory would produce approximately one million automobiles annually.

The site would be a Tesla “gigafactory” that will make vehicles, including their truck and sports car, according to an unnamed Mexican official, as reported by Reuters.

Tesla, like other automakers, anticipates a substantial increase in the sale of electric vehicles in the coming years as customers shift to more environmentally friendly forms of transportation.

Tesla’s announcement comes only weeks after BMW’s announcement that it will invest in a manufacturing in Mexico. Ford also produces its electric SUV in the United States.