Tesla and its suppliers will reportedly invest $15 billion over the next two years in the Gigafactory Mexico facility, said Nuevo Leon state governor Samuel Garcia.
The amount is triple what Mexican officials previously announced after Tesla CEO Elon Musk said in March that his company would open a gigafactory in Mexico’s northern state of Nuevo Leon.
At the time, Musk did not offer details about Tesla’s investment, but Mexican officials said the factory would involve a $5 billion investment. Now, Nuevo Leon Governor Samuel Garcia said at an event that the facility will involve thrice that amount.
“Just Tesla and its suppliers will generate an investment of $15 billion in two years,” the governor said according to Reuters, without explaining the big difference over the initial estimate. He added that this “enormous amount” will require Nuevo Leon to spend more on highways and other public works.
Tesla and Nuevo Leon officials did not respond to Reuters‘ request for comment on the governor’s remarks.
Tesla has not announced a start date for construction of its Gigafactory Mexico or when it will start producing vehicles. Sources previously told Reuters that the EV maker planned to begin manufacturing EVs in Mexico in 2025.
Giga Mexico will play an essential role in the company’s efforts to expand its global footprint. The facility will produce Tesla’s next-generation vehicle, although the automaker did not provide more details.
Initially, it was believed that Tesla’s next-gen platform, which will underpin both the $25,000 electric car and the robotaxi, will have its production debut at Gigafactory Mexico, but it looks like there has been a change of plans.
According to Walter Isaacson’s recently released “Elon Musk” biography, Tesla has decided in May 2023 to change the initial build location for the next-generation EV from Mexico to Austin, Texas.
This means that development and initial production will take place at the Giga Texas factory before the working production lines are replicated in Mexico and possibly other places.
The main reason for the decision to start production of Tesla’s next-generation EV in Mexico is that the company’s top engineers are unwilling to relocate to the neighboring country to develop the manufacturing lines.
Walter Isaacson noted in the book that “Tesla engineering will need to be on the line to make it successful, and getting everyone to move to Mexico is never going to happen.”