Tesla Has Not Yet Registered Investment in Mexico, Minister Says

Tesla Has Not Yet Registered Investment in Mexico, Minister Says

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(Bloomberg) — Billionaire Elon Musk’s electric vehicle maker Tesla Inc. hasn’t yet formally registered its plans for investment in a factory near Monterrey, Mexico, where it intends to make a next-generation electric vehicle. 

While the company has made the announcement for an investment that could eventually rise to $10 billion over multiple phases, it hasn’t registered the plan with the Economy Ministry, its top official, Raquel Buenrostro said an interview with El Financiero Bloomberg TV. 

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“It’s not clear to us what’s concrete compared to the announcement,” she said. 

The comments come after Musk said in its third-quarter earnings call that the company isn’t ready to go “full tilt” on its construction in the state of Nuevo Leon in northern Mexico. The plant has been touted by both the state and federal governments as a sign that Mexico is attracting top companies as shifting supply chains boost so-called nearshoring investments. 

The investment Tesla had planned required certain volumes of water that are currently not available due to a drought, Buenrostro added in the interview. The national government has said it will prioritize water for domestic consumption. Still, she still believes the company’s decision is “firm, even if it’s delayed” because its suppliers are setting up in the area. 

“The signs are good, even if there are delays,” she said. 

Other key points from the interview:

  • Mexico has counted over $100 billion in investment announcements expected to materialize in the next two to three years; $70 billion from foreign companies and $33 billion from local companies
  • The figure could even be larger, as the government estimates that for every peso in investment announced, on average 3 pesos are spent. That’s even higher for Chinese companies, which spend 10 pesos for every peso announced, she added
  • The government is on track to announce Nov. 17 the results of a tender for five industrial parks in the south of the country
  • The government is interested in attracting wind farms to an area of Oaxaca near the wind farms, but regardless of whether that goes forward it has committed to bidding companies that they will have clean energy produced from existing wind farms and a hydroelectric dam in Chiapas
  • The Economy Ministry is in talks with the Finance Ministry to expand tax incentives intended to entice nearshoring investment
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