WORLD NEWS

Mexican president says Tesla to build plant in Mexico

Feb 28, 2023, 4:30 PM | Updated: 4:44 pm
Mexican President Andres Manuel Lopez Obrador gives his regularly scheduled morning press conferenc...

Mexican President Andres Manuel Lopez Obrador gives his regularly scheduled morning press conference at the National Palace in Mexico City, Tuesday, Feb. 28, 2023. (AP Photo/Marco Ugarte)

(AP Photo/Marco Ugarte)

MEXICO CITY (AP) — Mexico’s president announced Tuesday that electric car company Tesla has committed to building a major plant in the industrial hub of Monterrey in northern Mexico.

President Andrés Manuel López Obrador said the promise came in phone calls he had Friday and Monday with Tesla head Elon Musk. It would be Tesla’s third plant outside the U.S., after one in Shanghai and one near Berlin.

López Obrador had previously ruled out such a plant in the arid northern state of Nuevo Leon where Monterrey is the capital, because he didn’t want water-hungry factories in a region that suffers water shortages. But he said Musk’s company had offered commitments to address those concerns, including using recycled water.

“There is one commitment that all the water used in the manufacture of electric automobiles will be recycled water,” López Obrador said.

The president said it would be a large investment without giving a dollar amount, and did not specify what the plant would produce. He said it was unclear if it would produce batteries, an industry Mexico desperately wants despite not having any current domestic supply of lithium.

López Obrador said the company planned to release more details on Wednesday.

“This is going to mean a considerable investment and many, many jobs,” López Obrador said. “My understanding is that it will be very big.”

Monterrey is highly industrialized and close to the U.S. border, and had long been considered the frontrunner for any Tesla investment.

But the city suffered water shortages in 2022 that were so severe that many homes went weeks with intermittent or no water supply. The government is building a 60-mile (100 kilometer) pipeline to bring more water in from a dam.

López Obrador had previously said his government “simply won’t grant permits” for any new plants there. But apparently Musk’s proposal overrode the president’s stance.

Gabriela Siller, chief economist at Nuevo Leon-based Banco Base, said the Tesla investment — which she estimated could be worth $10 billion — represented such a large amount that it trumped any of the president’s objections.

López Obrador “could not turn this down. It would have had a very big political cost for him,” said Siller.

The announcement was a disappointment for more water-rich southern states that had begun jockeying for the Tesla plant after López Obrador’s comments last week.

The governor of Nuevo Leon state, where billboards went up last year saying “Welcome Tesla,” crowed about Tuesday’s announcement.

“Mexico won, Nuevo Leon (NL) won, WE ALL WIN!” Gov. Samuel García wrote in his Twitter account.

López Obrador said Mexico wouldn’t match any U.S. subsidies to win the Tesla plant, referring to U.S. incentives under the 2022 Inflation Reduction Act.

“A subsidy like that, we cannot give subsidies like that,” the president said, adding “Mr. Musk was very attentive, respectful” of Mexico’s position.

Tesla is expected to announce plans for its “Gen 3” vehicle platform on Wednesday at its annual investor day at a factory near Austin, Texas.

Musk previously has floated the idea of building a $25,000 electric vehicle, which would cost about $20,000 less than the current Model 3, now Tesla’s least-expensive car. Many automakers build lower-cost models in Mexico to save on labor costs and protect profit margins.

Musk also is expected to show off the company’s production line at the Austin plant, as well as discuss long-term expansion plans, how it will spend capital investment dollars, and other subjects.

___

AP reporter Tom Krisher contributed to this report

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

World News

President Joe Biden speaks with children after delivering a speech at the Royal Castle Arcades on F...
Associated Press

Day after Ukraine visit, President Biden in Poland to affirm Western resolve

President Joe Biden, in Poland, said the Russian invasion of Ukraine has hardened Western resolve to defend democracy around the globe.
1 month ago
People search a collapsed building following an earthquake in Azmarin town, Idlib province, norther...
Associated Press

Death toll soars after powerful earthquake rocks Turkey and Syria

A powerful 7.8 magnitude earthquake rocked wide swaths of Turkey and neighboring Syria on Monday, killing and injuring thousands of people.
2 months ago
FILE - A fuel trucks drives along a highway in Frankfurt, Germany, Jan. 27, 2023. European Union go...
Associated Press

Europe bans Russian diesel, other oil products over Ukraine

The new sanctions create uncertainty about prices as the 27-nation European Union finds new supplies of diesel from the U.S., Middle East and India.
2 months ago
(Photo by John Phillips/Getty Images for BoF VOICES)...
Associated Press

Vivienne Westwood, influential fashion maverick, dies at 81

Vivienne Westwood, an influential fashion maverick who played a key role in the punk movement, died Thursday at 81.
3 months ago
FILE - British Prime Minister Boris Johnson speaks during his first Cabinet meeting flanked by his ...
Associated Press

Rishi Sunak: UK’s ex-Treasury chief gets his shot at PM job

LONDON (AP) — Rishi Sunak ran for Britain’s top job and lost. Then he got another shot — and the chance to say “I told you so.” The former U.K. Treasury chief was runner-up to Liz Truss in the contest to replace the scandal-plagued Boris Johnson as Conservative Party leader and prime minister. But Truss […]
5 months ago
Britain's Prime Minister Liz Truss addresses the media in Downing Street in London, Thursday, Oct. ...
Associated Press

Truss quits, but UK’s political and economic turmoil persist

LONDON (AP) — British Prime Minister Liz Truss quit Thursday after a tumultuous and historically brief term marred by economic policies that roiled financial markets and a rebellion in her political party that obliterated her authority. After just 45 days in office, Truss became the third Conservative prime minister to be toppled in as many […]
5 months ago

Sponsored Articles

(Pexels Photo)...

Sports gambling can be fun for adults, but it’s a dangerous game for children

While adults may find that sports gambling is a way to enhance the experience with more than just fandom on the line, it can be a dangerous proposition if children get involved in the activity.
...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Desert Institute for Spine Care photo)...
DESERT INSTITUTE FOR SPINE CARE

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
Mexican president says Tesla to build plant in Mexico