Tesla’s suppliers from China are hastily establishing business operations in Mexico to effectively and efficiently aid the company in running the new Gigafactory’s electric vehicle production.
To be specific, they will supply the necessary automotive parts for building battery-powered vehicles at the Gigafactory in Mexico. South China Morning Post reported that at least seven China-listed firms have already confirmed Mexican expansion plans.
Tesla invites Chinese partners to Mexico
Tesla was the one that encouraged its Chinese suppliers to establish business operations in Mexico to facilitate easy and seamless dealing for the new Gigafactory.
The local publication indicated that at least three Chinese auto parts supplier executives confirmed receiving formal invitations from the Musk-led company to develop Mexican factories. These companies include the following:
- Aluminum alloy parts producer Ningbo Xusheng Group
- Heat control parts maker Zhejiang Sanhua Intelligent Controls
- Chassis manufacturer Tuopu Group
Xusheng already announced plans in late March to invest $276 million to establish a Mexican production line. Sanhua also stated in June that it would also build a local heat control system factory with an 8 million annual capacity that would cost $146.2 million. Meanwhile, Tuopu aims to invest $200 million to erect a factory in the country.
In addition, industry officials disclosed that dozens of Tesla’s Chinese suppliers would adhere to Tesla’s call as it aims to establish its own supply chain in the country. That said, these companies will also localize their auto parts production.
“It is a win-win scenario. Tesla needs Chinese suppliers to support its running of the Mexican Gigafactory, while Chinese car-part makers have been looking to tap overseas markets due to overcapacity worries at home.”
Peter Chen, Shanghai-based ZF TRW Engineer
See Also:
- Tesla updates Giga Mexico’s vehicle production schedule to Q1 2025, per a report
- Tesla supplier CATL, hunting sites for Battery plant in Mexico
- Tesla is developing a new production line for the $25,000 EV in Giga Mexico, per Gov. Sepúlveda
- Tesla Giga Mexico construction may begin in March, with new EVs arriving the following year
- Tesla officially confirmed plans to erect its next
Tesla previously claimed that the new Giga Mexico will have an annual production output of 1 million EVs, with plans to commence operations in H2 2024. However, previous reports suggest that Tesla adjusted the timeline to Q1 2025.
The entry of Chinese suppliers to support Tesla’s EV production at the new Gigafactory will undoubtedly aid the automaker in achieving its goals for the Mexican market. They will make it easier for Tesla to source the necessary components and materials rather than importing them from China to Mexico.
