Mexico Pressures Tesla for Gigafactory
On February 15th, Samuel García, the governor of Nuevo León, Mexico, made comments to local media about the current state of construction at Tesla’s new Gigafactory site.
The Governor made mention of a sort of negotiation that has been happening between his office, the local government of the Monterrey area, and Tesla itself over when exactly the official work would begin. García says that his last conversation with company management ended with his request to begin construction in March, and they didn’t say no, so the hope is that they break ground in less than a month.
Tesla was originally supposed to start the process in February, but it was pushed back to March as infrastructure issues became apparent - road access, electrical and water connections, and some unspecific environmental concerns have all been cited as reasons to delay the build.
The governor has already assured Tesla management that the state is currently expanding the Monterrey-Saltillio highway that passes by the company’s build site, and the local government recently offered Tesla a $135 million incentive package which included infrastructure spending for the area, and a reduction in payroll tax to sweeten the deal.
But Tesla still seems to be dragging its feet here.
One reason for this was shared back in October, when the company announced that they were slowing down the usual headlong rush that normally accompanies a Gigafactory construction project, due mainly to an uncertain global economy.
Inflation getting worse in the last half of 2023 was only one reason though, as Tesla also chose to move the development of their new $25k vehicle platform to GigaTexas, where their engineering team and best infrastructure was already in place - so there has been less of a pressing need to make their new, top-of-the-line factory in Mexico.
And Tesla hasn’t been the only group with concerns about the project, either.
Local citizens and politicians have been increasingly worried about the impact this huge facility will have on the economy - the concept of nearshoring has been thrown around a lot. Nearshoring is the business practice of outsourcing tasks, material gathering, and recruitment to nearby countries instead of investing locally - and with Tesla’s main operations being relatively close by on the US side of the border, the people living in Nuevo León are worried that local businesses and job seekers won’t be able to take a lot of benefits from having a Gigafactory on their doorstep - to say nothing of the strain on their electrical and water utilities.
And that’s a fair thing to worry about, but it certainly doesn’t help Tesla’s anxiety with pulling the trigger on this facility. For now the Nuevo León government is spending some money to expand their infrastructure in the Monterrey area, so they’ll just have to wait and see if it’s enough to entice Tesla to start building.