The next Tesla Gigafactory should be open in Mexico!

According to Reuters, the manufacturer could confirm on Friday the establishment of its next Gigafactory in Mexico, more precisely in Nuevo Leon. The initial investment representing an envelope comprised between 800M and 1 billion dollars. The overall project could represent 10 billion dollars according to a local newspaper. The announcement should come with Christmas.

Why a new Gigafactory in Mexico?

The function of this new Gigafactory is not common. Indeed, it would not initially be dedicated to the construction of a particular Tesla. The idea of ​​the manufacturer would be to irrigate its factories with products that will be cheaper to manufacture. An investment to further improve the margin on each electric vehicle sold.

The Mexican Gigafactory started by making components for current Tesla models, a source told Reforma, before eventually building a new model at a lower cost than other factories.

Eventually, this new production tool will be able to deliver the new Tesla Model 3 Highland with a price just under $30,000, to compete with the Ford Mach E, Kia and Hyundai.

Mexico is a mature country for automobile production. The country does not have a national car manufacturer but 80% of vehicles assembled in this country are intended for export, mainly to the United States (72.2% of exports) and Canada (10.5%).

Does this announcement in Mexico signal the end of the rumours?

It’s good to ask yourself this question. The investment is substantial and the macro-economic environment is sufficiently unstable to merit asking this question. Until now we hear rumors of opening in India or Canada.

These rumors are studies commissioned by the manufacturer, it is not a plan on the commission but corresponds to a desire to install a new production tool mainly to meet local demand. For example, the Gigafactory Shanghai mainly supplies the strategic Chinese market.

Now India and Canada seem to have lingering reservations about the tempo of these openings. Is the country sufficiently mature in electric vehicles to allow an opening?

I don’t think the manufacturer is stopping all the studies, but naturally this announcement should set back the other projects by at least a year.

Leave a Comment