Monday, June 3, 2024

Is the Tesla gigafactory in Mexico still happening? Nuevo León official says yes

Nuevo León Economy Minister Iván Rivas insists that Tesla is still planning to build its highly-anticipated gigafactory in Mexico, despite the project being slow to start and amid the company’s ongoing layoffs worldwide.

“We have not had any signal change,” said Rivas at a press conference announcing Nuevo León’s upcoming International Mobility of the Future Summit (IMOF). “We are working hand in hand [with Tesla] on the incentive contract,” he assured.

Ivan Rivas in a suit and tie holding a PowerPoint remote behind a projector screen with a slide in Spanish that says, "In this way, Nuevo Leon ascends."
Nuevo León Economy Minister Iván Rivas, seen here in 2022, recently assured inquiring reporters this week that the Tesla gigafactory in his state is a sure thing. (File photo)

Since Tesla CEO Elon Musk announced the plans for an electric vehicle (EV) factory in northern Mexico in March last year, the start date for construction has been postponed and a lack of information has fueled speculation about the project’s viability. According to Nuevo León’s governor Samuel García, the project will generate US $15 billion in investment.

While Rivas admitted that there’s not an agreed date to break ground, he stressed there’s no doubt that the Tesla gigafactory in Mexico is happening.

“Tesla is coming, it is coming,” Rivas said.

Incentives for Tesla to build their latest factory in Mexico were confirmed last year, and include widening the Monterrey-Saltillo highway (from two to three lanes), building road infrastructure to enter and exit the factory and constructing water treatment infrastructure, as well as tax benefits.

When asked by reporters whether the recent worldwide layoffs at Tesla might have had an effect on the project, Rivas said that layoffs in Mexico were in the commercial area, not those positions related to the development and construction of the Nuevo León plant.

“The engineers working on the plant development … come from abroad and have visited the plant many times,” he said. 

Mexico's President Lopez Obrador meeting in the National Palace with Tesla officials about building a gigafactory in Mexico
Back in March 2023, when Elon Musk announced the plans for the factory, President López Obrador met with Tesla officials in the National Palace. (Cuartoscuro)

Eduardo Aguilar, a professor at the University of Monterrey (Udem), told the newspaper El País that infrastructure construction by Nuevo León public works officials to accommodate the plant is ongoing at the planned gigafactory site in Santa Catarina — located about 15 kilometers from Monterrey. 

“The land remains the same as it was a year ago, that is undoubtedly true, but all the government works related to the plant’s construction have already begun,” Aguilar said. “The machinery and signage indicate that the promised expansions to access and stormwater infrastructure by the state have already begun.”

Musk himself said last October that while the Nuevo León factory was confirmed, he was not ready to “go full tilt” given global economic conditions. At the time, he said the first phase of construction would begin in early 2024.

Despite the speculation about the gigafactory’s fate, Rivas said that the announcement of the Tesla plant has boosted Nuevo León as an electromobility hub since Tesla has invited its suppliers to relocate to Mexico

“Around 30 [Tesla] suppliers are already here in Nuevo León,” Rivas said.

With reports from Milenio and El País

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