Tesla Ups Investment in Mexico Gigafactory to Reported $15 Billion

Wim De Gent
By Wim De Gent
September 13, 2023Business News
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Tesla Ups Investment in Mexico Gigafactory to Reported $15 Billion
Tesla's Model 3 is displayed during an event one day ahead of the official opening of the 2023 Munich IAA Mobility Auto Show, in Munich, Germany, on September 4, 2023. (Angelika Warmuth/Reuters)

A state governor in Mexico said on Monday that Tesla and its suppliers would invest $15 billion over the next two years in a factory that is still under construction—an amount triple that which Mexican officials had previously announced.

In March, Tesla CEO Elon Musk said his company would open a gigafactory in the northern border state of Nuevo León, as part of the electric carmaker’s push to expand its global footprint.

At the time of the announcement, Mr. Musk called the new factory “the biggest electric vehicle plant in the world,” but did not disclose any details about the investment. Deputy Foreign Minister Martha Delgado later revealed on X, formerly Twitter, that the factory would involve a $5-billion investment.

Speaking at an event on Monday, Nuevo León Governor Samuel García said the facility will now involve three times that amount.

“Just Tesla and its suppliers alone will generate an investment of $15 billion for the next years,” the governor said—an “enormous amount.”

Mr. García said the project will require the state to spend more on infrastructure, such as on highways and, as previously announced, an aqueduct and dam.

Tesla agreed that the factory would use recycled water throughout its manufacturing process, Mexican President Andrés Manuel López Obrador said in an interview. He had previously expressed to Mr. Musk his preference for the plant to be built in the south of the country, due to potential water supply issues during the dry spells to which Mexico’s northern states are prone.

The new plant will bring Tesla closer to achieving its ambitious goal of ramping up production to 20 million vehicles per annum by the end of the decade.

For the whole of 2022, the company produced 1.3 million vehicles.

“We’ll continue to expand production at all of our existing factories,” Mr. Musk said in March. “So this is not moving output to anywhere, from anywhere. This is supplemental production.”

The Mexico facility will be Tesla’s sixth gigafactory and its third outside of the United States, after the firm opened plants in Shanghai, China, in 2019, and Berlin-Brandenburg, Germany, in 2022.

The plant will be built in Santa Catarina, a city adjacent to Monterrey, and which is about 390 miles away from Tesla’s headquarters in Austin.

In March, Tesla confirmed that the new location will manufacture a next-generation vehicle priced below the Model 3, which starts at $43,000, though exact details have not yet been released.

“We will have a proper product event, but we’ll be jumping the gun if we’re to answer your questions,” Mr. Musk said at the time.

Reuters contributed to this article.

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