Elon Musk, the world’s richest man, will open his Tesla mega-plant in Nuevo León, Mexico, just outside Monterrey. Photo: Tesla

By MARK LORENZANA

Electric car manufacturer Tesla will open a mega-plant in the northeastern Mexican state of Nuevo León, announced President Andrés Manuel López Obrador (AMLO) on the morning of Tuesday, Feb. 28, at his daily press conference.

López Obrador confirmed the news after phone calls with Tesla CEO Elon Musk on Friday, Feb. 24, and Monday, Feb. 27. The Mexico plant, an investment that could be worth up to $10 billion, will be Tesla’s third assembly plant outside of the United States, aside from locations in Shanghai and Berlin.

AMLO essentially walked back on his statement that he was ruling out Nuevo León as a site for the Tesla plant, after citing the problem of scarcity of water in northern Mexico, but explained that Tesla made a commitment to use recycled water for the manufacturing of its electric cars.

“The plant is going to be established in Monterrey, pending several commitments from Tesla to address the problem of water scarcity, specifically the use of recycled water in the entire manufacturing process of its electric cars,” López Obrador said. “But this is good news. The entire Tesla company is coming, the entire automotive plant, which I understand is going to be very large.”

The move had yet to be officially announced by Tesla as of Tuesday, but is expected to be confirmed Wednesday, March 1.

Northern Mexico declared a drought emergency in July 2022, and authorities in parts of the country, including Monterrey, were forced to ration water due to depleted reservoirs.

Mexico is the world’s seventh largest vehicle producer, according to figures from the Mexican Automotive Industry Association (AMIA).

The automotive industry in the country represented 3.5 percent of the gross domestic product (GDP) in 2021, and created 930,000 jobs, with foreign investment in the sector amounting to $5.3 billion that year, according to the AMIA.

Likewise, German vehicle manufacturer BMW recently announced an $870 million investment to produce electric cars in Mexico.

Meanwhile, financial news and media company Bloomberg announced on Tuesday that Musk has regained his spot at the world’s richest person — after temporarily ceding his place to French business magnate Bernard Arnault last month — after the Tesla CEO “benefitted from a 100 percent rally in the electric carmaker’s stock from its low in January.”