Nuevo León is currently hosting at least 25 suppliers in Tesla's supply chain, and they find themselves at a crossroads. With the uncertainty surrounding the Mexican plant, these suppliers are shifting their focus toward the booming operations in Austin, Texas. Tesla's status as the leading brand in electric cars has driven sales volumes at the Austin plant, making it an attractive destination for suppliers.
Manuel Montoya, director of the Nuevo León Automotive Cluster, mentioned that these suppliers continue production regardless of the Mexican project's status, indicating their satisfaction with the Austin plant's performance.
A Game-Changing Investment
One of the most striking developments in the Mexican project is the recent announcement by Samuel García, the state governor of Nuevo León, Expansion reports. He revealed that the total investment for the Mexican plant, including the supply chain, would amount to a staggering $15 billion. This potential investment would dwarf Tesla's previous capital commitments, including the $1 billion for the Austin factory, marking a significant milestone in the company's history.
The plan aligns with Tesla's global strategy of establishing production facilities in key regions. The company allocated $2 billion for its plant in Shanghai, China, its first outside of the United States. Similarly, the investment in the Berlin-Brandenburg complex in Germany amounted to 5 billion euros. In Mexico, Tesla aims to produce its most affordable vehicle, possibly named Model 2, catering to the American and Asian markets.
A Dual Manufacturing Approach
Elon Musk has expressed interest in manufacturing the same affordable vehicle in both Mexico and India, emphasizing the importance of Mexico's strategic position due to its numerous trade agreements. These agreements enable vehicles produced in Mexico to be sold in up to 46 countries without additional tariffs, providing a significant advantage in the global market.
In summary, Tesla's plans in Texas and Mexico are shaping up to be game-changers in the electric vehicle industry. While Texas remains a hub of innovation and production, Mexico's potential mega-investment could redefine the company's manufacturing capabilities. As Tesla strives to produce 20 million vehicles annually by 2030, these developments are pivotal in achieving that goal.
Stay tuned for more updates as the electric vehicle giant continues to make waves on both sides of the border.
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com 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. He has more than a decade of expertise in the automotive industry with a special interest in Tesla and electric vehicles.
Giga Texas Image by Joe Tegtmeyer / X.
- Reuters - Site of Tesla Mexico factory near double size of Texas plant
- Electrek - Tesla will build next-gen/cheaper electric cars in Texas
- The Verge - Tesla set to spend $770 million expanding Texas Gigafactory
- TeslaRati - Tesla Gigafactory Mexico will build the company's next-gen
- Houston Chronicle - Tesla plans distribution site west of Houston in Brookshire
- FreightWaves - Musk confirms Tesla will build factory in Mexico