Start on Tesla EV plant in Mexico nearing

Tesla Inc. could break ground on its new factory in Mexico as soon as next month, the governor of Nuevo León said recently.

During a mid-February visit to a Monterrey community center, Gov. Samuel García Sepúlveda said Tesla leadership told him the Austin-based electric vehicle maker is set to begin construction of the massive facility in March.

He also discussed continuing issues with permitting for the plant’s electricity and water demands, as well as concerns about its environmental impact as reasons for delays, according to the Mexican newspaper Milenio.

The governor said the factory in his state will be larger than originally planned and that Tesla management in Mexico had requested an extension to the environmental permitting.

“Since the state is already building the roads and accesses, I asked them for Tesla to come by March at the latest to make a groundbreaking announcement,” the governor said. “And they didn’t say no, so I hope that very soon, in less than a month, Tesla comes … to do the project.”

The state of Nuevo León has invested more than $153 million in infrastructure incentives in its so-called Tesla District. The work includes roads, water treatment and a reduction in payroll tax. It’s also expanding the Monterrey-Saltillo Highway in expectation of a near-shoring boom.

Word of progress on what Tesla calls Gigafactory Mexico comes after months of CEO Elon Musk tempering expectations about the timeline — while highlighting its future importance.

“In Mexico, we’re laying the groundwork to begin construction and do the long lead items, but I think we want to just get a sense for what the global economy is like before we go full tilt,” Musk said after issuing Tesla’s third-quarter earnings report in October. “I am worried about the high interest rate environment that we’re in.”

In January, Musk said the company has plans for a new model, known as Redwood, that will begin production at its factory near Austin and eventually expand to the plant in Mexico. As it gears up for Redwood, Musk said, new manufacturing techniques and equipment will require engineers to be “living on the (Texas assembly) line” to set up production.

“This is a revolutionary manufacturing system, far more advanced than any other in the world,” he said.

Tesla has said its investments in Mexico could bring more than $10 billion to the country’s economy over multiple phases.

The company did not respond to a request for comment.