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Tesla Is Targeting Two Different Things With a Factory in Mexico

Recently, the president of Mexico made an exciting announcement regarding Tesla's expansion plans. Why Tesla is looking at two locations for a Gigafactory in Mexico? I think Tesla is targeting two different things.

According to the announcement, Tesla is considering two different locations in Mexico for a new factory, indicating the company's ambitious goals for the region. With the construction of this new facility, Tesla is targeting not one, but two key objectives.

By setting up shop in Mexico, the electric vehicle giant hopes to tap into the growing market demand and also take advantage of the favorable business conditions in the country. This latest development is a testament to Tesla's continued commitment to driving innovation and revolutionizing the automotive industry.

Our Torque News Youtube viewers had some great opinions on this subject, one of which I would like to share here with you.

Leandro Montavani writes: My opinion is that Tesla is targeting two different things with a factory in Mexico, and by the way, I don’t think that the location matters much as long as it is in Mexico exactly because what you said, there is a tariff exception due to the accord with Brazil.

Here ( In Brazil) there are not many options of electric vehicles, but it doesn’t means that the people here don’t wanna buy it. It is because of the import taxes of 110%, which makes the purchase not affordable to the majority of the population. Actually now everyone wants to buy more than never as the war caused the fossil fuels to spike prices, but no car manufacturers decided yet to build an electric vehicle factory here and as I said the prices to buy it overseas are to high.

But Tesla's possible deal with Mexico would end this problem. I just need to make a correction: there is actually a tax incentive to EV in Brazil in some states about excepting IPVA payment which is kind of like the car insurance is in US that needs to be payed every year and it’s priced based on the car’s blue book.

Also the new economy minister Haddad mentioned recently that intends to support this matter.

Another thing that comes in mind about a Tesla factory in Mexico is supply chain to US using cheap manpower and avoiding though government policies in general, related to the industry like the ones in Shanghai that have cost months worth of production for Tesla.

My response:

It's great to hear your thoughts on Tesla's decision to build a factory in Mexico. You bring up some interesting points, including the tariff exception with Brazil and the impact on EV adoption in the country. It seems like the import taxes are currently making it difficult for the majority of the population to afford EVs, but with the new tax incentives and the support of the economy minister, that may change in the near future.

You also mentioned the advantage of having a factory in Mexico for the supply chain to the US and avoiding tough government policies. It's clear that Tesla is taking a strategic approach to its expansion, balancing the benefits of lower costs and accessibility with the potential challenges of government policies. Overall, it will be interesting to see how the Mexican factory contributes to the growth and development of the EV market both in Mexico and Brazil.

Another viewer, Scott T things Tesla will setup at both locations. The one near Mexico will be the main factory. The location next to the airport will simply be an anchor tenant concession from musk to help spark interest in other companies setting up there. So far the airport has been dubbed useless and this announcement will reduce the criticism of the president’s project. The CDMX location will probably be more of a regional marketing and R&D center

That's an interesting take on Tesla's plans to set up two locations in Mexico. It makes sense that the main factory will be near Mexico, while the location near the airport will serve as an anchor tenant to attract other companies and spark interest in the area. By doing this, Tesla is not only investing in its own growth, but also supporting the development of the local economy. The move will likely help reduce criticism of the airport project and position it as a hub of innovation and progress. The fact that the CDMX location will also serve as a regional marketing and R&D center highlights Tesla's focus on not only production, but also research and development. This multi-faceted approach to growth is a testament to Tesla's forward-thinking approach and commitment to advancing the future of transportation.

What do you think about Tesa's possible gigafactory in Mexico? Is it a good possibility?

Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.