Numerous companies from the automotive industry have already settled in the Mexican city of over a million inhabitants.
(Photo: Reuters)
Dusseldorf Canada, South Korea or Indonesia: Many countries had hopes that Tesla would build its planned new factory there. Now, however, Mexico is probably winning the race, as two people from the industry told the Handelsblatt. Tesla has not yet responded to a request from the Handelsblatt.
According to insiders, the US electric car manufacturer’s fifth factory will be built near Monterrey. The megacity in north-eastern Mexico is close to the border with Texas and is already home to more than 4,200 foreign companies, including many from the automotive industry such as Mercedes-Benz, General Motors and Hyundai.
Tesla boss Elon Musk announced the project a year ago. “2022 is the year we are looking for a location for a factory,” Musk said, with “a possible announcement by the end of the year.” Musk confirmed the goal last August at the Annual General Meeting.
“Giga Mexico”, as the plant is already being called in reports, would be the company’s fifth car factory after Fremont in California, Shanghai, Grünheide near Berlin and Austin in Texas. According to Musk, he is planning a total of ten to twelve plants in order to be able to produce 20 million vehicles a year by 2030.
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Details of what type of vehicle will be manufactured in Mexico or how much Tesla wants to spend are not yet known. According to a report by the Mexican newspaper “Reforma”, Tesla initially wants to invest 800 million to one billion dollars. That would be similar to the initial investment at locations like Grünheide. According to the report, Tesla wants to spend a total of ten billion dollars, while the Gigafactory in Grünheide is estimated to cost just over half.
Electric cars: Mexico is included in US funding
An important factor for Tesla: A few weeks ago, Canada and Mexico persuaded the US government that they too would be covered by the electric car subsidy in President Joe Biden’s “Inflation Reduction Act”. This would allow US manufacturers to import components or entire vehicles from neighboring countries and probably claim the full amount of tax breaks.
There was already an indication of Tesla’s interest at the end of October. Back then, Elon Musk was visiting Monterrey. Photos showed the 51-year-old with a representative of the Mexican Ministry of Economy and the wife of the governor of the state of Nuevo León.
Some Tesla suppliers are already on site
Tesla suppliers such as Enflex and Quanta Computer from Taiwan, Faurecia from France and ZF from Germany are already based in the city. The exchange is so lively that a few months ago the state of Nuevo León introduced its own vehicle lane for Tesla at the border crossing to Texas to speed up the movement of goods.
Monterrey is one of the most popular locations for foreign companies in Mexico. According to the state’s economic development agency, from October 2021 to August of this year alone, 90 investments worth $4.2 billion were made, 39 of them from the USA and three from Germany. No other industry was more active than the automotive industry with 18 projects.
Foreign companies like Tesla are not only attracted by the low salaries, but also by the large number of skilled workers. There are over 150 universities in Nuevo León, from which more than 8,000 engineers and almost 22,000 technicians graduate each year.
Problems with recruitment in Germany and the USA
Recruitment is a problem for many manufacturers in the US. According to the IG Metall union, Tesla is also fighting in Grünheide. The manufacturer wants to hire 12,000 employees there, currently there are 7,500. According to IG Metall, Tesla does not get enough people on board due to the payment.
Grünheide currently produces 3000 vehicles per week. That’s better than Tesla’s Austin factory and an increase from September, when it made 2,000 vehicles a week. However, the company is lagging behind, because Musk announced in 2021 that he wanted to produce 5,000 to 10,000 vehicles per week in Grünheide.
In order to get closer to the goal, a third shift is to be introduced this month. A few weeks ago, Tesla apparently hired a temporary employment agency. “For the German site of a US electric car manufacturer, the personnel service provider will fill 600 vacancies in December of this year,” said a press release from the service provider Manpower.
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