Tesla to build electric cars in Monterrey, Mexican president says

Mexico City, Feb 28 (EFE).- Mexican President Andres Manuel Lopez Obrador said Tuesday that Tesla CEO Elon Musk told him the company plans to build an electric car plant in the northern city of Monterrey.

“Things are going well, we chatted yesterday with Mr. Elon Musk, the director of Tesla. There is an understanding, they will dedicate the investment to Mexico and they are going to establish the plant in Monterrey, with a series of commitments to confront the problem of the shortage of water. They are going to help in that regard,” Lopez Obrador said at his daily morning news conference.

The word from the president, known as AMLO, put an end to months of speculation about the possibility of a Tesla factory in Mexico.

“I don’t want to expand on the information, because I believe that the detailed announcement will be made tomorrow by the company, Tesla, and also they will announce some commitments and other commitments next week,” he told reporters.

Just last week, AMLO said that his administration would not authorize a Tesla plant in Monterrey, Mexico’s second city and chief industrial hub, because the facility’s high demand for water would add to the pressure on supply amid a drought that last year forced authorities in Nuevo Leon state to impose rationing on households.

The Mexican government had sought to persuade Tesla to locate instead near the new international airport serving Mexico City.

But AMLO said Tuesday that in his conversations with Musk, the Tesla CEO “understood the importance of addressing the problem of shortage of water.”

“There is an initial commitment, which is the use of recycled water in the entire process of manufacturing automobiles,” the president said. “He was very receptive, understanding our concerns and accepting our proposals, which are going to be disclosed starting tomorrow. This will mean a considerable investment and many jobs.”

AMLO said he pointed out to Musk that unlike the United States, Mexico does not offer subsidies to firms that build electric-car batteries and semiconductor chips.

“He understood that perfectly and we discussed that without those subsidies, the comparative advantages of Mexico are unique in the world and we agreed – and that pleased me very much – that the principal resource of Mexico is the quality of its workers,” the president said.

Hours after AMLO spoke in the capital, Nuevo Leon Gov. Samuel Garcia said that Musk invited him to Texas for Wednesday’s official announcement of the plant in the Monterrey suburb of Santa Catarina.

“We go to Austin tonight. We are very happen that Elon Musk invited us to Investor Day, which begins tomorrow at 11:00 in the morning, and they told me that tomorrow they will display a rendering of how the biggest ‘gigafactory’ in the world in Santa Catarina,” the governor said.

He thanked AMLO, Foreign Secretary Marcelo Ebrard, “and all who collaborated to make this grand project happen,” Garcia said.

EFE ppc-agc/dr