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Tesla in Nuevo Leon: a $4.5 billion investment.

NUEVO LEÓN: Santa Catarina, a municipality in Nuevo León with fewer than 310,000 inhabitants, has attracted international attention thanks to Tesla. The richest man on the planet, Elon Musk, will invest more than 4.5 billion dollars in Mexico to build a plant capable of producing up to one million electric cars per year, according to sources familiar with the project. The megaplant to be built in Mexican territory will join the two production centers the company has overseas in Shanghai and Berlin, with the rest of its production centers located in the US. Tesla will reveal the project details on Wednesday as part of its Investors Day.

Mexico will enter the electric car manufacturing industry with Tesla’s support. After more than a year of negotiations and competition among the states to attract this important investment, Mexican President Andrés Manuel López Obrador confirmed on Tuesday that the car plant will be located in Nuevo León. “The entire Tesla automaker is coming, a very large plant,” said the president this morning at the National Palace. The president assured that after a couple of video calls, an agreement was reached with Musk that also includes commitments on the use of water in the state, one of the issues that concerned the government the most.

The site chosen by Musk is located in Santa Catarina, a municipality with just over 310,000 inhabitants and only 380 kilometers from Austin, Texas, the epicenter of Tesla’s operations. Although Mexico already has more than two decades of experience in the automotive sector, mainly in the Bajío region of the country where players like Audi or BMW already have production lines for electric cars, this will be the first megaplant specialized in electric cars, units that, in line with the global green trend, have been gaining ground, to the detriment of traditional combustion cars.

For experts and industry leaders, it is not surprising that Nuevo León won the bid for this multimillion-dollar investment. The proximity to the United States and the affordable prices of both land and skilled labor are some of the factors that, according to specialists, played in favor of the State government to secure the project. Pedro Tello Villagrán, an expert in industrial issues, points out that Tesla’s investment in Mexico represents an opportunity to position the country at the forefront of automotive technological progress. However, this possibility will require government capital injections into infrastructure, education, and security. “Additional investments will have to be made to have the infrastructure as quickly as possible and with the supply guarantees that allow the company to operate with the levels of efficiency,” he specifies.

Currently, Nuevo León has only two car manufacturers in its territory, Hyundai and Kia Motors, companies that generate around 3,500 direct jobs. Specialists agree that the arrival of a firm like Tesla will attract more companies to the state. The automotive sector specialist points to the training of more skilled labor as a challenge. ” A plant of this size will have to take at least five or four years to start operating, I think it gives the State Government time to train the best technicians possible. But at the same time, it opens up an opportunity for the best professionals from the rest of the country to find a development opportunity in a company like Tesla,” he says.

Fernando Turner, CEO of Katcon, a manufacturer of exhaust systems and catalytic converters in Nuevo León, highlights the industrial corridor that exists between the state capital and the city of Saltillo (Coahuila) as one of the competitive advantages of the state. “We are very well connected and the land is not so expensive,” he says. Regarding the issue of water availability – one of the most delicate points of negotiation due to the scarcity in the state – the businessman warned that the government must invest to guarantee the supply if it means the industrial development of a region.

Musk will confirm the details of his investment in Mexico in the coming hours. From the president of the Republic to the municipal president of Santa Catarina, Jesús Nava, they have all welcomed the news with enthusiasm. However, experts agree on a warning: Tesla can either be an anchor company to trigger the technological advancement of the country, or just another missed opportunity if a national supplier ecosystem and technological automotive companies are not developed around it.


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