Tesla is the latest American manufacturer to invest in Mexico
Tesla plans to open a $5 billion plant in Mexico as the Latin American country stands to benefit Inclusion in US subsidies for electric vehicles.
The new website is in Industrial center of Monterreythe President of the country Andrés Manuel López Obrador said Tuesday. The company is expected to provide more details on the expansion over time Tesla Investor Day on Wednesday, which will be broadcast live from Austin, Texas.
Tesla has plants in California, China, Germany, New York and Nevada combined produced 1.37 million cars in 2022. The automaker’s investment comes as global demand for electric vehicles continues to boom: The global electric vehicle market was valued at $9.5 million in 2022 and is expected to grow eight-fold $80.7 million by 2030, according to a report by Research and Markets, a market research firm.
As part of the agreement, Tesla agreed to use recycled water at the plant throughout the vehicle manufacturing process, López Obrador said. In June, the Mexican government asked farmers in Monterey to distribute their water to local residents and businesses in a bid to reduce water use during weeks of acute water shortages. according to reporting from the Los Angeles Times. Worry about water consumption had contributed to delays in commissioning the Tesla factory in Berlin.
Why are companies opening factories in Mexico?
Tesla’s move is the latest in a production expansion in Mexico that has already taken place Tensions with Europe flared up. BMW announced a new investment from $866 million in electric vehicle and battery production in the state of San Luis Potosi. General Motors said it would invest more than $1 billion in Mexico to produce electric vehicles. To be eligible for USA clean vehicle loana vehicle must be finally assembled in North America.
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As the Covid-19 pandemic disrupts supply chains around the world, companies have sought to move their plants closer to the final destination of goods diversify their sources reduce supply chain risks. Another part of the draw to expand into Mexico? cheap labour. Manufacturing wages in China have tripled in the last decade, and factory workers in Mexico are currently earning an average wage just over $2 an hour.