ALBAWABA - Electric car manufacturer Tesla plans to invest $5 billion in setting up a new factory in northern Mexico, its third plant outside the United States after China and Germany.
Car manufacturing plants have been on the rise in Canada and Mexico as American firms look beyond their borders to reduce costs, primarily the extortionate labor costs.
Mexico is positioning itself as one of the possible venues, banking on tensions between its northern American neighbor and China, which disrupted supply chains.
Tesla to build new factory in Mexico https://t.co/8S4k0pcpGS
— BBC News (World) (@BBCWorld) February 28, 2023
The BBC reported that Mexican President Andres Manuel Lopez Obrador said the plant for the electric car firm would be in Monterrey, which is about a three-hour drive from Texas in the United States.
Tesla selects Monterrey, Mexico as the site of its next Gigafactory https://t.co/LlUv1C60Ea pic.twitter.com/O6ZMDH6lYX
— Engadget (@engadget) February 28, 2023
Previously, Mexico "raised concerns" about how water demand from the factory might affect the area, the BBC said.
It said Lopez Obrador said he had "won commitments from Tesla boss Elon Musk that had helped ease those worries." the president did not elaborate.
Lopez lauded Tesla's move, saying it presents a "considerable investment" that will provide many jobs domestically, according to the BBC.
Reuters and other major news outlets reported that Tesla's investment is worth $5 billion.
The electric vehicles plant that Tesla will establish in Mexico will require around $5 billion in investment, an official at the government of the Latin American nation says https://t.co/eDdD0aNlLe
— Bloomberg (@business) March 1, 2023
