![Tesla Gigafactory Mexico](https://electrek.co/wp-content/uploads/sites/3/2023/03/Tesla-Gigafactory-Mexico.jpg?quality=82&strip=all&w=1600)
Tesla has officially paused its Gigafactory Mexico project over a potential Trump election win, which would greatly reduce the factory’s profitability.
Tesla officially announced Gigafactory Mexico back in March 2023, 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.
We suspected that a potential concern forcing Tesla to pump the brakes is that Former President and current Republican candidate Donald Trump has clearly stated that he plans to put tariffs on vehicles built in Mexico and coming into the US.
This would greatly reduce the profitability of a plant in Mexico for Tesla.
Musk has previously stated that he believes Trump will win the US election, and he is even “fully endorsing” him and contributing financially to his campaign.
Top comment by Ajerry
There is no way that true, Tesla volume is much lower than their current manufacturing production capacity so why would they start building in Mexico. The truth is until demand outstrips capacity they are not building any more new car factories period.
The CEO has supported Trump’s plan to remove EV incentives and emission credits, which enabled Tesla’s profitability in recent years.
Tesla reported its Q2 2024 financial results yesterday and confirmed that more than half of its profits came from selling emission credits. That doesn’t account for the consumer-level incentives, which help Tesla’s sales in the US.
Electrek’s Take
That’s what we suspected. If you believe that Trump is going to win, and Elon not only believes that but is actively working to make it happen, then it makes no sense to invest in a factory in Mexico.
Maybe Elon should have thought about that before promising the people of Nuevo Leon a factory?
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