Tesla could start making cars in Mexico next year
Tesla's new factory in the Mexican state of Nuevo Leon will cost $5 billion, will employ up to 7,000 people and could start churning out cars as early as next year, the state's governor said Friday.
Tesla announced this week that it planned an assembly plant in Mexico — its fifth worldwide — but provided few details about the investment, including how much it would spend, when construction would start, how many people would work at the factory or how the company would deal with regional water shortages.
Samuel Garcia, Nuevo Leon's 35-year-old governor, filled in some of the blanks. He said Tesla executives had told him that the factory — outside Monterrey, the state's capital — could grow to be the company's largest, producing not only cars but batteries, semiconductors and software. Over time, Tesla could double or triple the initial $5 billion investment, Garcia said in a telephone interview.
“These opportunities, I think they happen once every 100 years,” he said.
Tesla's plans in Mexico could help make the country a central player in the development of lithium and lithium-ion batteries in the Western Hemisphere. Mexico has one lithium mine under development in the northwestern state of Sonora, and the Tesla plant could encourage the country to undertake more projects.
Latin America has lots of lithium, and Chile is a major producer of the metal. But efforts to mine it in Argentina and Bolivia have been less successful.
Mexican President Andres Manuel Lopez Obrador is a strong proponent of oil production and has been criticized for being slow to embrace green energy. But Garcia, who is not a member of Lopez Obrador's party or one of the primary opposition parties, said he was satisfied that the president supported investment in lithium.
It seems unlikely that any Tesla factory will surpass the company's plant in Shanghai, which serves the fast-growing Chinese market and exports vehicles to other Asian countries and Europe.
Tesla did not respond to a request for comment.
Still, Garcia's comments suggest that the Tesla factory will be a centerpiece of the company's operations, allowing the company to build cars more cheaply than it could in the United States and better respond to growing competition from established automakers such as General Motors and Volkswagen. Those companies already offer electric vehicles that cost less than Teslas, including the Chevrolet Bolt and the Volkswagen ID.4, and are planning to sell many more mass-market models in the coming months.
Volkswagen announced a new challenge to Tesla's dominance of the electric vehicle market Friday, saying that it would spend $2 billion on a factory near Columbia, South Carolina, to produce pickup trucks and SUVs under the Scout brand. The German carmaker is reviving the U.S. off-road vehicle brand that was used by International Harvester in the 1960s and `70s. Scouts were among the first massproduced off-road vehicles, which have become a lucrative segment of the U.S. auto market. Tesla, so far, does not make off-road vehicles.
Tesla executives said Wednesday during an investor presentation that the Mexico factory would produce a new vehicle priced below the Model 3, which starts at $43,000 in the United States. The company has not unveiled a design for the vehicle or disclosed other details, but its effort in Mexico could help attract a wider customer base.