Mexico pushes Tesla to start Gigafactory construction soon, but it hesitates

The Mexican government is pushing Tesla to start construction of Gigafactory Mexico soon, but it looks like the automaker doesn’t feel ready.

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 and secured roughly $135 million worth of incentives for the factory.

Now, it looks like Mexico is getting angsty about the situation and wants Tesla to break ground on the factory.

The governor of Nuevo León, Samuel García, recently commented that he believed Tesla would start construction soon.

In new comments to local media (via Milenio – translated from Spanish), Garcia said that he talked to Tesla recently and that the company raised a few issues:

Today I spoke with… I’m going to say, with the management in Mexico, there is already the electrical issue, there is the water issue, there is the environment, they had requested an extension of the environmental permit because it seems that the plant is going to be more bigger than they thought.”

Tesla has been asking for the government to deploy infrastructure, including electrical, water, and roads, at the factory site, and it has been part of the previously reported incentive package.

García said the government is already on it and he is hoping construction will start next month:

“I told him that since the State is already building the roads and accesses, I asked them for Tesla to come by March at the latest to make a groundbreaking announcement, and they didn’t say no, so I hope that very soon, in Less than a month, Tesla comes, now the company is going to do the project,” 

Though Tesla seems to hesitate to commit.

Electrek’s Take

Now that we have a better idea of the timeline for the next-gen vehicles, late 2025, Gigafactory Mexico is becoming less urgent.

It does take a while from groundbreaking to production, but since Tesla decided to start next-gen vehicle production at Gigafactory Texas, and it won’t start until late 2025, they have some time.

Tesla is likely not looking to start production at Gigafactory Mexico until it has ramped up next-gen vehicle production at Gigafactory Texas in order to use what it learned from the ramp in Texas.

Therefore, I wouldn’t be surprised if Tesla doesn’t plan to start production at Gigafactory Mexico until 2026 at this point.

But even then, it would make sense to start working on the structure soon.