Mexican state woos Tesla, offers $153 million incentive for new plant
- Tesla plans its next factory in Nuevo Leon in Mexico but Elon Musk had previously urged for better electricity, water and transportation services.
Tesla may well be one of the most sought after companies by governments across the world because of the sheer scale of revenue and employment generation its factories create. Built on massive scale, the numerous Tesla factories across the world have helped the company build on its lead in the world of electric vehicles or EVs. But as the Elon Musk-led company has been hunting for newer markets where it wants newer factories to be established, leading many countries to offer incentives. The latest is Mexico.
The Mexican state of Nuevo Leon has reportedly offered 2.63 billion pesos' incentive for Tesla for its next plant here. This converts to approximately $153 million. According to a report in the Reuters, the state’s economic development council has approved the incentives while also offering a reduced payroll tax.
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Tesla had already been working on the plants for a plant in Nuevo Leon but earlier this year, Musk had urged local officials here to enhance electricity supply, water and transport services here before the actual construction could take place. He had also said that the high interest rates were detrimental to Tesla plans for here.
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Tesla plans to manufacture its slew of entry-level EV models from Mexico. But since the plant at Nuevo Leon isn't expected to be up and running for at least a few years, these new-age Tesla models will be rolled out from the company facility in Texas instead.
But this hardly means that Tesla isn't keen. The company has informed it will invest around $10 billion in a phased manner into the Nuevo Leon facility. The local government here says the first investment from Tesla would be to the tune of around $4.5 billion.
Tesla is the global leader in the EV market and has a sizeable lead over all its rivals. With mammoth ambitions of manufacturing 20 million units each year by 2030 - double of any of its nearest rivals - the company is looking to expand aggressively. At present, it has plants in the US, China and Germany, and others for components. The upcoming plant in Mexico, however, is the next mega project and is expected to provide employment to around 10,000 persons once fully constructed and operational.
