Tesla in Nuevo Leon: an investment of 4.5 billion dollars and up to one million electric cars per year

Santa Catarina, a municipality in Nuevo Leon with less than 310,000 inhabitants, has attracted international spotlight thanks to Tesla. The richest man on the planet, Elon Musk, will invest more than 4.5 billion dollars in Mexico in the construction of a plant capable of producing up to one million electric cars per year, sources familiar with the project have confirmed to EL PAIS. The mega-plant to be built in Mexican territory will be added to the two production centers that the company has abroad in Shanghai and Berlin, the rest of its production centers are located in the US. The details of the project will be announced by Tesla this Wednesday as part of his Investors Day.

Mexico will enter through the front door in the manufacture of electric cars with the impulse of Tesla. After more than a year of negotiations and competition between the States to attract this important investment to their coffers, finally, this Tuesday the President of Mexico, Andres Manuel Lopez Obrador, has confirmed that the automotive plant will be installed in Nuevo Leon. “The entire Tesla company is coming, the entire automotive plant that is going to be very large,” the president said this morning at the National Palace. The president assured that, after a couple of video calls, an agreement was reached with Musk that also includes commitments on the use of water in the State, one of the issues that most concerned the Executive.

The land chosen by Musk is located in Santa Catarina, a municipality with just over 310,000 inhabitants and only 380 kilometers from Austin, Texas, the epicenter of Tesla’s emporium operations. Although Mexico already has more than two decades of experience in the automotive sector, mainly in the Bajio region of the country where players like Audi or BMW already have production lines for electric cars, this will be the first mega-plant specializing in electric cars, units which, in line with the global green trend, have been gaining ground, to the detriment of traditional combustion cars.

Currently, Nuevo Leon only has two car manufacturers in its territory, Hyundai and Kia Motors, firms that generate close to 3,500 direct jobs. Specialists agree that the arrival of a firm like Tesla will attract more firms to the entity. The specialist in the automotive sector recognized the training of more qualified labor as a challenge. “A plant of this size should take at least five or four years to start operating, I think it gives the State Government time to train the best possible technicians, but at the same time it opens an opportunity for the best professionals from the rest of the country find a development opportunity in a firm like Tesla”, he says.

Fernando Turner, executive director of Katcon, a manufacturer of exhaust systems and catalytic converters in Nuevo Leon, assured the industrial corridor that exists between the state capital and the city of Saltllo (Coahuila) as one of the State’s competitive advantages. “We are very well connected and the land is not that expensive,” he says. On the issue of water availability–one of the most critical issues in the negotiation due to the scarcity of the resource in the State–the businessman warned that the Government must invest to guarantee the water supply if that means industrial development of a region.

Musk will confirm in the next few hours the details of his territory in Mexico. From the president of Mexico to the municipal president of Santa Catarina, Jesus Nava, they have tossed their bells. However, specialists agree: Tesla can be an anchor company to detonate the country’s technological progress or just a new lost opportunity if an ecosystem of national suppliers and technological automotive companies does not develop around it.