For a few months, rumors have circulated about Tesla and its plans to open up a plant in Mexico. According to Bloomberg, the electric car maker is set to make an announcement soon about an upcoming investment in Mexico.
These reports suggest that Tesla has been in talks with the Mexican government in an attempt to find a suitable location to set up a plant in the country. The company has reportedly seen several of these locations, although not many details have been released at the moment. Fox2now reported the plant may be heading to Monterrey, the capital of Nuevo Leon and a city not too far from the border. Monterrey is also one of Mexico’s tech hubs, where a high concentration of engineers and tech professionals live and work.
The country has large deposits of lithium, which are a required material for electric car batteries. Due to these reserves, many predict the country can be a top spot for semiconductors and other necessary materials.
Mexico has a vested interest in electric vehicles as it promotes some of its own clean-energy initiatives. The country has several ongoing plans that prioritize clean energy, such as the Sonora Plan. The Mexican president announced his country would be willing to incur debt to build the biggest solar plant in Latin America at Puerto Peñasco. Most of the initial investment (in the form of low-interest loans) are coming from the U.S. The construction will happen with U.S. and Mexican companies. The plan is part of the country’s clean energy initiatives to meet their recently announced carbon emissions goals. The Sonora Plan is also designed to bring in foreign investment.
In recent years, nearshoring in Mexico has become increasingly popular thanks to trade agreements with Mexico and its proximity to the United States. Companies like Ford and GM have or are considering Electric Vehicle production plants in the country because of some of these reasons. At the same time, many companies that had operations in China are looking to Mexico as a better outsourcing destination given diplomatic relations and trade agreements between the countries. Many investors are finding that doing business in China is proving costly in various aspects. At the same time, the supply chain crisis highlighted why bringing operations closer to home is beneficial. Reports indicate that there is a nearshoring momentum happening in the area as companies seek to bring production closer to home. The head of Bank of America’s head of Canada and Mexico economics predicts that the country is headed for massive growth in coming years because of these various factors colliding together.
According to the Mexican minister, about 400 companies are looking to set up shop in Mexico with 25 industrial parks in development.
Nearshoring in Mexico is not limited to manufacturing, but also to tech jobs like software developers, engineers, and other tech professionals. Thanks to increased education in these fields and improved training programs, Mexico’s tech industry and talent pool has garnered a reputation in recent years as a burgeoning market.