Tesla has secured roughly $135 million worth of incentives for Gigafactory Mexico despite delaying the construction of the factory.
Tesla officially announced Gigafactory Mexico back in March, and until recently, we were wondering what was the hold up to start production after the automaker said it wanted to move fast.
In October, Tesla confirmed that it was pumping the brakes on the project amid concerns about the global economy.
CEO Elon Musk said that the project would happen, and Tesla is ordering “long lead items” for it, but the timing would depend on how they see the economy recover. In the meantime, the automaker prefers investing in Texas.
But on the Mexican side, things have kept moving forward.
The Nuevo León secretary of economy, Iván Rivas, recently announced that Gigafactory Mexico has received all its needed permits to start construction.
Today, the Nuevo León government announced that it has approved an incentive package for Tesla Gigafactory Mexico (translated from Spanish):
The incentives for the Tesla Gigafactory in Nuevo León were approved by the state Economic Development Council and based on the Investment Promotion Law and Employment for the State of Nuevo León.
Top comment by Aaarrrgggh
To me starting construction about a year after purchase is a pretty fast sequence, and is a pretty responsible gate for Tesla. Mexico's strategic importance is long term though and there is little benefit to having an empty shell of a building rushed through quickly. Looking at how they are extending the south end in Texas it appears as though they have a better handle on a construction techniques that meet their needs for flexibility.
I would be surprised if rough grading doesn't start in earnest in Q1, with underground and foundation work starting by Q2. That gives them the starts of a factory in mid-late 2025, and mass production in late 2026.
The incentive package takes the form of investment in local infrastructure, like water and roads around the factory site, and a reduction in the payroll tax.
Together, the incentives are valued at about 2,627 million pesos (~$153 million).
Now, it’s up to Tesla to pull the trigger on starting construction of the factory.
The Nuevo León government expects Tesla to invest $4.5 billion in the project and create 4,500 jobs before accounting for indirect investments and jobs.
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