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While the administration of Mexican President Andrés Manuel López Obrador (AMLO) — in an apparent attempt at creating a self-fulfilling prophesy — was busy announcing Tuesday, Jan. 31, that Elon Musk’s Tesla was “considering” opening a plant near the the nearly abandoned Felipe Ángeles International Airport (AIFA), just north of Mexico City, the U.S-based electric car manufacturer itself was instead pointing out that it has serious reservations about continuing with much-touted preliminary plans to open a plant in the northern Mexican state of Nuevo León.

The lack of a reliable electricity supply by Mexico’s state-owned Federal Electricity Commission (CFE) “could slow down” the installation of Tesla’s $10-billion giga-plant in Nuevo León, Tesla inside sources in Austin, Texas, told Reforma newspaper.

“During his visit a few months ago, Musk chose the land and, in turn, gave the Mexican government his requirements to be able to settle in Nuevo León,” said a U.S. financial adviser involved in the proposed Mexico operation.

Those requirements included access to water, viable transportation infrastructure, a reliable labor pool and affordable electricity, the source said.

It is the issue of affordable energy that could pose a possible barrier to the installation of Musk’s assembly company in Nuevo León, he said.

Musk visited Nuevo León twice last year to discuss locating options for the possible plant.

After the second visit, at the end of October, the Tesla CEO chose a piece of land between the towns of Santa Catarina and García.

Later, members Musk’s negotiating team began talks with the CFE, the source said.

“The meeting of Tesla’s envoys with the CFE did not go well, and they requested that the company have access to alternative electricity providers,” he said.

“That is where the problem that they are now trying to resolve lies.”

The Tesla source said Mexico’s federal electricity policies “make it difficult to hire providers other than the CFE.”

Another foreign venture, the Spanish-owned Iberdrola plant in Dulces Nombres, also located in Nuevo León, has remained closed by government orders since February of last year, despite having obtained multiple injunctions for its reopening, and has been fined more than 9 trillion pesos for providing energy to other companies.

Meanwhile, the companies to which that plant supplied electricity were forced to contract energy from the CFE, which charged at least 30 percent more for the electricity.

In the meantime, Tesla announced on Wednesday, Feb. 1, that it intends to step up production at its Shanghai plant over the next two months to a weekly average of 20,000 cars to meet a growing demand ignited by aggressive price cuts on its best-selling models.

But despite all the above, López Obrador’s head of communications, Jesús Ramírez, told reporters on Tuesday that Tesla was “considering” setting up a plant at an industrial park that is currently being developed about 3 kilometers from the AIFA, in the central State of México.

Ramírez said that the proposed plant could be used as an export hub for Tesla.

So far, Tesla has not responded to Ramírez’s claims.

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