The construction of Tesla’s Gigafactory 5 in Santa Catarina, Nuevo Leon, Mexico, will be completed in record time: less than nine months. It will be the first in Latin America and the third outside the United States.
According to the rating agency Moody’s Local Mx, the investment contemplated in this super project reaches US$5 billion and will translate into higher income for the state and a greater demand for bank credit for the region.
Billionaire entrepreneur Elon Musk’s new electric car plant will generate up to 35,000 direct and indirect jobs due to the scale of all operations, from construction to operation and beyond.
The installation of Tesla’s Gigafactory 5 in Mexico is not only great news for the Mexican automotive industry. It also involves major developments in different industries, as Tesla and Elon Musk’s plan goes beyond just making cars. Lithium mining, construction of aerospace elements and even technology development laboratories in other states are among the plans.
This new Gigafactory in Mexico will be the largest electric car plant in the world and will also make the country the leading producer of these cars in Latin America. New generation models will be produced there, including the brand’s entry-level sedan (Model 2), which would be positioned below the Tesla Model 3 and would imply a significant increase in sales for Tesla.
But why invest in Mexico?
According to the Mexican Ministry of Foreign Affairs, these three reasons motivated the entrepreneur to install Tesla’s Gigafactory 5 in this territory:
1. Mexico’s free trade agreements
Mexico has zero tariffs on several inputs imported from China that are important for manufacturing.
2. Proximity to the Austin plant
Currently, Tesla has the capacity to manufacture around two million cars per year in four factories, one of them located in Austin, Texas, just 6 hours away from Nuevo Leon, which will add dynamism to its value chain.
According to the numbers handled by the government entity, almost half of the engineers working for the company worldwide have been trained in Mexico.