Tesla to Build New Factory Near US Border in Northern Mexico Worth 6.6 Trillion Won

The site for Tesla's new factory in Mexico, after much confusion, has finally been decided to be in the northern region bordering the United States.

According to foreign media, Mexican President Andr?s Manuel L?pez Obrador announced in a briefing on the morning of the 28th of last month (local time) that Tesla will build a factory in Monterrey, a border area in northern Mexico.

Although various state governments in Mexico made efforts to attract the Tesla factory, Monterrey in Nuevo Le?n, which CEO Elon Musk personally visited and showed interest in, was ultimately selected.

[Image source=Yonhap News]

President L?pez Obrador had previously declared a firm "absolutely not" stance, stating that this region suffers from drought and that the water shortage would worsen if the Tesla factory were built, but it seems Musk's persistence prevailed in the end.

L?pez Obrador added that Tesla will reveal specific details about the factory construction at the 'Investor Day' event on March 1. He said, "This is good news. Yes, the company Tesla is coming to Mexico." He also emphasized, "The battery factory is still on hold, but the car factory will be built. It will be huge."

The Tesla factory to be built in Monterrey will be located just a few hours by car from the southern Texas border, making it Tesla's first factory in Latin America. Currently, Tesla has four factories in the United States, and one each near Shanghai, China, and Berlin, Germany.

Samuel Garc?a, governor of Nuevo Le?n, also welcomed the news on Twitter, saying, "Mexico won. Nuevo Le?n won. We all won!"

The location of the Tesla factory fully leverages Mexico's advantage of being a border area with the United States. Amid supply chain disruptions and rising tensions with China, Mexico, with its low wages, abundant workforce, and border with the U.S., has now secured the Tesla factory.

Meanwhile, German automaker BMW has decided to build an electric vehicle factory in Mexico, where electric vehicle benefits under the Inflation Reduction Act (IRA) are provided, investing 800 million euros (about 1.124 trillion won), instead of building an electric vehicle factory in the United States.